Buy Bank of Baroda, target Rs 190: Nomura

Merger ratio favourable; maintain Buy: BOB’s board has decided on the merger ratio for the amalgamation of Dena Bank and Vijaya Bank, implying a nearly 6-27 per cent discount to the current prices of Dena/Vijaya Bank and 18-43 per cent lower than BOB’s Sep-18 valuation. We believe this is fair for BOB’s shareholders given BOB’s superior franchise and NPA coverage position. Our pro forma estimates indicate a merged company ROE of +12 per cent by FY21F. The merger will be nearly 4 .. Read more at: //