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MUMBAI: Spandana Sphoorty Financial has risen 29 per cent since Wednesday’s close amid talk that the company may be a target for acquisition for leading private sector lender .
On Thursday, Moneycontrol reported that Axis Bank is looking to acquire a majority stake in the company, and on Friday, The Economic Times reported that the company along with Arohan Financial Services are options for acquisition for Axis Bank.
Axis Bank is looking to strengthen its reach in the rural areas and acquiring a microfinance lender with a greater range in rural areas is seen as a suitable acquisition. The lender already has more than 1.5 million microfinance borrowers under its microfinance lending vertical.
Spandana Sphoorty, in a clarification to the stock exchanges, said that it was unaware of the source of the news item on Moneycontrol, and “that as a matter of corporate policy, we do not comment on media speculation”.
Brokerage firm CLSA Asia Pacific Markets, in a note on Monday, suggested that based on Friday’s closing price an all-share deal would result in a swap ratio of 0.99 for Spandana Sphoorty’s investors.
The brokerage firm said that the combined entity’s 2020-21 profit after tax will increase 2 per cent, while the return on equity will rise 0.1 per cent. However, it noted that the price-to-book value of the combined entity will fall 0.3 per cent to 1.98 times.
Shares of the non-bank finance company saw profit booking on Monday, ending 1.9 per cent lower at Rs. 732 on NSE.
On Thursday, Moneycontrol reported that Axis Bank is looking to acquire a majority stake in the company, and on Friday, The Economic Times reported that the company along with Arohan Financial Services are options for acquisition for Axis Bank.
Axis Bank is looking to strengthen its reach in the rural areas and acquiring a microfinance lender with a greater range in rural areas is seen as a suitable acquisition. The lender already has more than 1.5 million microfinance borrowers under its microfinance lending vertical.
Spandana Sphoorty, in a clarification to the stock exchanges, said that it was unaware of the source of the news item on Moneycontrol, and “that as a matter of corporate policy, we do not comment on media speculation”.
Brokerage firm CLSA Asia Pacific Markets, in a note on Monday, suggested that based on Friday’s closing price an all-share deal would result in a swap ratio of 0.99 for Spandana Sphoorty’s investors.
The brokerage firm said that the combined entity’s 2020-21 profit after tax will increase 2 per cent, while the return on equity will rise 0.1 per cent. However, it noted that the price-to-book value of the combined entity will fall 0.3 per cent to 1.98 times.
Shares of the non-bank finance company saw profit booking on Monday, ending 1.9 per cent lower at Rs. 732 on NSE.
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