SBI associate banks on a roll on reports of Govt go ahead for merger with parent

Shares of 3 associate banks of SBI surged 17.9% to 20% at 10:20 IST on BSE, extending gains registered during the previous trading session triggered by media reports that the government has given its go ahead for merger of 5 associate banks with SBI

State Bank of Mysore was locked at 20% upper circuit on BSE at Rs 657.45. State Bank of Travancore was up 18.6% at Rs 568. State Bank of Bikaner and Jaipur was up 17.9% at Rs 707.20. All these three stock rose by their respective 20% maximum permissible daily level yesterday, 15 June 2016. In just two trading sessions, the stock price of State Bank of Mysore has risen 43.98%, the stock price of State Bank of Travancore has jumped 42.32% and that of State Bank of Bikaner and Jaipur has jumped 41.52%.

The stock price of parent State Bank of India (SBI) was currently up 0.5% at Rs 216.85. The stock surged 3.9% to settle at Rs 215.65 yesterday, 15 June 2016.

Meanwhile, the S&P BSE Sesnex was off 299.71 points or 1.12% at 26,426.63

On 17 May 2016, SBI had announced that it was seeking in principle sanction of the Government of India (GoI) to enter into negotiation with its 5 subsidiary banks viz. State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore to acquire their businesses including assets and liabilities. At that time SBI also said that its board of directors will take a final call after evaluating all the relevant considerations. SBI also said at that time that it was considering acquisition of the newly-created Bharatiya Mahila Bank.

SBI holds 90% stake in State Bank of Mysore, 79.09% stake in State Bank of Travancore and 75.07% stake in State Bank of Bikaner and Jaipur. State Bank of Hyderabad and State Bank of Patiala are not listed on the bourses.