BBN Bureau
Merger process likely be completed by Q2 or Q3 FY24
NEW DELHI/April 04-2022: The HDFC Group has designed a two-step merger to create the new financial behemoth, HDFC Bank.
As per the plans announced on Monday (April 04), HDFC Bank said its board has approved the merger of HDFC Investments and HDFC Holdings with HDFC, the wholly owned subsidiaries, and thereafter the new avatar of HDFC Ltd’s amalgamation into HDFC Bank.
The merger exercise between HDFC and HDFC Bank will see 42 shares of HDFC Bank to be exchanged against every 25 shares of HDFC.
Post the above, HDFC Bank will be 100 per cent owned by public shareholders and the existing shareholders of HDFC will own 41 per cent of HDFC Bank.
The merger process is expected to be completed between the second and third quarter of the financial year 2023-24 (FY24).
Both shares gained over 9 pc in trading
While HDFC Bank closed trading on Monday 9.83 per cent up at Rs1654.10, HDFC Ltd gained 9.12 per cent before closing at Rs2676.
“The board of directors of HDFC Bank has also accorded approval for the execution of an implementation agreement between HDFC and HDFC Bank, which inter alia sets out the manner of implementing the proposed transaction contemplated under the scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties in relation to the proposed transaction,” the bank said in a BSE filing.
HDFC has total assets of Rs6,23,420.03 crore, turnover of Rs 35,681.74 crore and net worth of Rs1,15,400.48 crore as on December 31, 2021.
HDFC Bank, on the other hand, has total assets of Rs19,38,285.95 crore, turnover (including other income) of Rs1,16,177.23 crore for the nine months ended December 31, 2021, and net worth of Rs2,23,394.00 crore, as on December 3, 2021.
HDFC Bank said the proposed transaction was at arm’s length basis, and will enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base.
The private lender said the proposed transaction is based on leveraging the significant complementarities that exist amongst the parties.
