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Wednesday, January 2, 2013

Merger of SBI Subsidiaries in the SBI

Anticipation of the  merger of listed subsidiaries in the State Bank . as per 

http://www.moneycontrol.com/news/business/sbi-plans-merger5-associate-banksnext-12-18-months_525518.html


resulted in a sharp rises in S B Bikaner & S B Travancore by around 5%  today. Above is a concise fundamental sheet of the listed subsidiaries & their Parent Bank. As compared to gigantic Capital of Rs. 671 crores of State Bank, its subsidiaries are capitalised at a merely Rs. 70 & 50 crores respectively. However, both the 75 % subdidiary have quite impressive fundamentals such RONW at 
15 .65 % & 13.24 % compared to Parent's 15% and these are quite consistent over the many years.

https://excel.office.live.com/x/ExcelView.aspx?FBsrc=https%3A%2F%2Fwww.facebook.com%2Fdownload%2Ffile_preview.php%3Fid%3D152797311536116%26metadata&access_token=1835286898%3AAVJy0F0saO9hsTmh4K1tqNiqqkRb7Nv6FlkcWdTgf5M_5A&title=SBI_Subs_DS.xlsx  


I am expecting 30-40 shares SBI against 100 shares of SBBJ  & 45-55 shares SBI against 100 shares of SBT. However, these being GOI enterprises, the final valuations & ratio for merger are difficult to anticipate. One silver lining is that the RBI policy is consistent & should prove beneficially to the minority shareholders which includes the LIC besides the Government of Kerala (in case of SBT ).





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