RBI okays Enam Securities merger with Axis Bank
10 September 2011
The Reserve Bank of India has approved Axis Bank's revised plan to acquire the broking and investment banking businesses of Enam Securities for around Rs2,067 crore. This ends nearly 10 months of uncertainty over the deal, according to several reports quoting banking sources.
The RBI has given its okay for the reworked share swap deal structure where Axis Bank will merge Enam with itself and transfer it to its subsidiary Axis Securities and Sales Limited (ASSL) at a later date.
The terms of the earlier proposal were revised following the central bank's discomfort with the structure of the deal which entailed Axis Bank offering shares to Enam, while the acquisition was done by a subsidiary.
Sources in the RBI told CNBC-TV18 that contrary to media reports, the central bank has not recommended an all-cash deal structure for the Axis-Enam deal. Axis says that they were never looking for an all-cash deal because in the first place, the RBI never objected to a stock-swap deal.
While the details of the revised structure were not known, reports said it would remain an all-stock deal.
The deal would still require approval from other regulators.