Aug. 24 (Bloomberg) -- State Bank of Travancore, a lender controlled by India’s biggest bank, surged to a record on speculation it may combine with its parent.
The bank’s shares rose 11 percent to 1,001.5 rupees at 11:42 a.m. in Mumbai after climbing 20 percent yesterday. The company is 75 percent owned by State Bank of India.
State Bank of Travancore advanced after its parent agreed to combine with another unit, State Bank of Mysore, fueling speculation India’s largest bank may also acquire the lender based in the state of Kerala, said Deepak Tiwari, an analyst at K.R. Choksey Shares & Securities Pvt.
State Bank of India will give 34 shares for every 100 owned by shareowners of State Bank of Indore, it said in a release to Bombay Stock Exchange on Aug. 21. State Bank of Mysore advanced 16 percent to 1,288 rupees and State Bank of Bikaner & Jaipur added 16 percent to 793 rupees.
“There is a positive sentiment as these banks are under-valued,” Tiwari said.
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