Mumbai, July 7: IDFC and Shriram group are in talks for a mega-merger of the two entities. An announcement regarding the possibility is expected to be made on July 8, 2017. If successful, the merged unit is likely to be worth over 10 billion dollars or Rs 65,000 crore.

The resultant unit will also emerge as one of the largest financial services providers across India. Both the Mumbai-headquartered IDFC Bank Ltd. and the Chennai-based Shriram Group have already established a huge network pan-India.

Reports of the possible merger led to a nearly- 10 per cent surge in the stocks of the IDFC and IDFC Bank on Wednesday. A combined unit will bring together Shriram Transport Finance and Shriram City Union Finance with the IDFC Bank, and the life and general insurance entities of Shriram Capital with IDFC.

According to a report in the TOI, a source within the Shriram Group allegedly said that if the merger is successful, it would include all the businesses of the group, including financing of commercial vehicles, homes, consumer goods, life and general insurance, stock broking, distribution of financial products and wealth management.

Meanwhile, another source was quoted as having said, “Conversations are on with 2-3 companies with the focus on expanding our retail franchise. Over the next few days, we will try and figure out which one is worth pursuing. Once we finalise the name, we would enter into exclusive talks and undertake due diligence, arrive at a valuation for the deal, and the regulatory approvals will follow. Nothing is finalised yet.”