ICICI Bank Ltd.

The boards of ICICI Bank and Bank of Rajasthan (BoR) on Sunday approved the merger of the latter with India's largest private sector bank in a no-cash deal that is valued at about Rs 3,000 crore. The banks have agreed on a final swap ratio of 1: 4.72 one share of ICICI Bank for 4.72 shares of BoR- for the merger. 
 
The board considered the results of due diligence covering advances, investments, deposits, properties and branches and employee-related liabilities, and the valuation report of Haribhakti & Co, to arrive at such a swap ratio. Now ICICI bank has to seek permission from RBI and will hold its EGM on June 21. This is the first take over by ICICI Bank after Kochhar took over as CEO. 
 
BoR is a value buying and not a bailout proposition. BoR will add 3 million customers and start contributing to the profit of ICICI Bank from next year. By diluting 3% equity, ICICI is adding 25 % of more branch network at one go. BoR will augment ICICI Bank's loan book and deposits by around 8% each. ICICI has now the largest number of branches among the private sector banks. ICICI Bank's valuation of BoR is on the basis of Rs 6 crore per branch. All BoR employees will be retained and there will no job losses.