HDFC Limited has already received permissions from Reserve Bank of India, Securities and Exchange Board of India (SEBI), PFRDA and Competition Commission of India (CCI) as well as India's stock exchanges BSE and NSE.
India's largest private sector bank HDFC Bank and its parent company i.e. HDFC are going to unite very soon. HDFC Limited, one of the largest companies in the country providing home loans against property, will also be found in the bank itself. The National Company Law Tribunal (NCLT) has approved the merger of the two on 17 March. It is being considered as the biggest merger in the corporate history of India.
RBI has already placed HDFC Bank in the category of Too Big To Fail bank. Now when it will be merged with HDFC Limited, then it will be one of the selected big banks of the country.
The merger of HDFC Limited with HDFC Bank has already been cleared by Reserve Bank of India, Securities and Exchange Board of India (SEBI), PFRDA and Competition Commission of India (CCI). At the same time, permission has been received from India's stock exchanges BSE and NSE. Now the Company Law Tribunal has also given permission to hold a meeting of the shareholders for this merger.
Merger will be completed in second or third quarter
Meanwhile, shares of HDFC Ltd and HDFC Bank were trading up 1.7 per cent each at Rs 2,575.95 and Rs 1,578.20, respectively, during late trade on BSE today. The HDFC-HDFC Bank merger is expected to be completed by Q2 or Q3 of FY24. In an exclusive interview with Moneycontrol on March 10, HDFC Vice Chairman and CEO Keki Mistry said that the merger would create huge growth opportunities for the combined entity.
The idea of merger had come in 2015 itself.
Mistry said that gradually, the aim is to expand home loans through more and more branches of the bank. The growth opportunity on housing loans will be bigger in HDFC Bank (combined entity) than in HDFC Bank. The merger of HDFC and HDFC Bank has been in the news for some time now. In fact, in 2015, Parekh had said that his firm might consider a merger with HDFC Bank if conditions were favourable.
Biggest merger in corporate history
This is being called the biggest transaction in the corporate history of India. HDFC Bank, on April 4 last year, agreed to take over the largest domestic lender in a deal worth around $40 billion, creating a financial services titan. The proposed entity will have a combined assets base of about Rs 18 lakh crore. Once the deal takes effect, HDFC Bank will be 100 per cent owned by public shareholders, and HDFC's existing shareholders will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.
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