Enam takeover: Shareholders to get five Axis Bank shares

After the long-awaited green signal from the central bank to its much-delayed takeover of Enam Securities, Axis Bank yesterday conducted a reassessment of the valuation and said Enam shareholders would now get five shares of the bank for every single share of the brokerage firm.

For Enam, this works out to around 2.93 per cent shareholding in Axis bank, according to managing director and chief executive of Axis Bank Shikha Sharma. She was interacting with reporters in Mumbai on Friday.

She said the prevailing market conditions and commercial considerations had warranted the reassessment. The swap ratio had been earlier fixed at 5.7 shares of the bank for one Enam share and the brokerage firm would have got 3.3 per cent stake in the bank.

Sharma said the RBI gave approval for the transaction on 31 March, adding that the relook at the valuation was not driven by regulatory guidance and that the approval would not come in before June 2012.

She said the change in the valuation was due more to  market dynamics, which had since changed, adding that the revised deal would be subject to regulatory approvals from the high courts of Gujarat and Maharashtra.

She said the Reserve Bank was okay with the change in the share swap as long as it was in favour of the bank. She added the structure remained the same that was to say that the securities business would be transferred to the bank and immediately be demerged and transferred to the subsidiary for a cash consideration of about Rs250 crore. She said the Axis subsidiary would raise this money through debt and equity.