Random Thoughts..

Merger of bandhan with gruh - Good or Bad?? Since last week, I am heating the loud noise the recent merger between Bandhan Bank and Gruh finance has created. I also got concerns from couple of my friends stating that this is not a good marriage. As an investor let me give you the some points as to why this marriage is made in heaven [ in short, this marriage is good news for the investors of both entities + investors of HDFC Bank + small MFI's ]. Per new arrangement, shareholding of HDFC will be 14.95%  As per the norms, one entity [in this case, HDFC] can own maximum 9.9% in merged entity; so HDFC will dilute its holding in merged entity -> which will have direct positive effect on HDFC Bank.  Both entities [Bandhan & Gruh] has overlapping customer base; so after arrangement Bandhan will have quality data on book.   After merger, dominance in East and West; plus war chest to acquire another small NBFC or MFI to get dominance in another region [this is ju