DEEPAL GANDHI & SHRAY KAMBOJ
CORPORATE TEAM
30.09.2011
ICICI BANK
K V Kamath,
MD & CEO
of ICICI
Bank
JOINED AXIS BANK
Chanda
Kocchar
Shikha Sharma
KV Kamath, Former MD & CEO of ICICI Bank retired on 30th April 2009.Chanda Kocchar & Shikha
Sharma were the top contenders for the post. Shikha Sharma lost to Chanda Kocchar and resigned to
join as CEO of Axis Bank.

Drive to make Axis bigger than ICICI
Brain Wave
Anil Singhvi ,
Former Gujarat
Ambuja CEO
Vallabh
Bhansali
Shikha
Sharma
Vallabh
Bhansali
Nimesh
Shah
Namura Securities Co,
Japan
Jagdish
Master
Enam was scouting for funds with Namura, Japan but the deal could not happen due to over
valuation. Enam was founded in 1984 by Manek Bhansali, Nimesh Shah, Vallabh Bhanshali and
Jagdish Master, who were referred to as the ‘Formidable Four’ of Dalal Street.
AXIS
BANK
- Larger market capital
- Entry into equity
capital market
- Commonality with
client profile
- One stop financial
shop
ENAM
SECURITITIES
Deal announced- 17th Nov 2010
AXIS BANK
consideration 3.3%
Equity
ENAM GROUP
demerge IB
& security
business
wholly owned
subsidiary
AXIS SECURITIES
AND SALES (ASSL)
acquire
ENAM SECURITIES
Valued at
2067 Cr

Cashless transaction

No capital gain tax

Vallabh Bhansali to be on the board as an independent director;

Bank shares were used as currency for payment of certain business;

This deal will set a precedent for other deals in future– Insurance company or
their division can be merged with banks.

Did not favour Vallabh Bhansali to come on Board of Bank;

Business was acquired not by Axis bank but by wholly owned subsidiary;

The intangible worth (goodwill) is huge i.e. 2067 – 274 Cr. RBI was not sure of
treatment of goodwill in Axis bank books;

RBI was worried of other banks following the similar transaction.

Announced on 16th september, 2011
Consideration 3.3% Equity
ENAM GROUP
AXIS BANK
DEMERGER
•
Enam gets 13.7 million
shares of Axis Bank
equivalent
to
3.35%
equity
•
1 share of Enam to get 5.7
share of Axis Bank
ENAM SECURTIES
AXIS BANK
SELL ENAM SECURITIES
ASSL (wholly owned subsidiary
of axis bank)
Pay 274 cr cash
equivalent to
bookvalue of Enam
business

Shareholder approval granted on 16th September, 2011;

Necessary approvals including that of the creditors of both the parties, apart
from the High courts of Mumbai and Gujarat are to be taken ;

Approval by capital market regulator Securities and Exchange Board of India
(SEBI) and periodic disclosure under SEBI (Issue of Capital and Disclosure
Requirements ) Regulations 2009 is required;

The deal will take another approximately six months to complete;

Axis Bank could not convince RBI to allow Enam Securities Chairman, Vallabh
Bhansali to become a director on its board.

First time a commercial bank with (government DNA) has acquired an nonbanking business by using shares as currency for such acquisition.

RBI is concerned of change in bank ownership due to such acquisition through
share swap.

IRDA has announced regulation to govern M&A in government insurance
space in the form of IRDA (Scheme for Amalgamation and transfer of General
Insurance business) Regulation 2011, similar regulation needs to be issued by
Banking Regulator - RBI to govern banking specific M&As.

RBI has prepared draft guidelines to issue banking licenses to private
entities. This move has facilitated ambitions of several industry giants
showing interest to share a slice of the Rs. 64 trillion industry which is set to
increase @ 20 % in the year 2014- 15*. Along with new entrants will come a
flood of similar M&As. We may capitalize on this growth and set up a division
constantly updating domain knowledge in the said sphere.
*FIDCI - Annual Survey Feb 2010, "Indian Banking Sector: The current state and
road ahead"