New Delhi: Fifteen months after the deal was struck, the proposed merger of investment banking and equities businesses of Enam Securities Pvt Ltd with Axis Bank Ltd is set to get the green signal from the Reserve Bank of India, sources told NewsWire18 on Thursday.
   
"All formalities are complete. All conditions that the RBI had insisted on have been complied with. The approval from the RBI should come next week," one of the sources said.
   
The RBI approval is the most crucial for the deal--it being a merger of two financial entities.
   
RBI had frowned upon Axis's invitation to Enam co-founder and Chairman Vallabh Bhansali to join the Bank's board.
   
"It is unlikely that Vallabh will join the board. At least not in the immediate future," another source said.
   
The RBI had also felt that Axis had overvalued Enam's businesses in question.
   
Under the deal, Enam Securities will merge its investment banking, institutional and retail equities, distribution of financial products, loans against shares and related businesses with Axis Bank.
   
Thereafter, Axis will sell the business to its own fully-owned subsidiary Axis Securities and Sales Ltd for 2.74 bln rupees.
   
In the all share-swap deal, Enam shareholders will get 5.7 shares of Axis Bank for every share held in Enam, translating into an approximately 3.37% shareholding in the bank.
   
The new structure had emerged after another objection raised by RBI—this one pertaining to Axis bank issuing its own shares to Enam shareholders even though the business was being acquired by a subsidiary and not the parent itself.
   
After the RBI clearance, the deal will take another six months to complete with the parties then needing to approach the capital market regulator and the Gujarat high court for their approvals.

(Agencies)