HDFC Bank on Saturday announced that the Pension Fund Regulatory and Development Authority (PFRDA) has approved the proposal for change in promoter of HDFC Life Insurance. HDFC which is the parent company of HDFC Life will merge with HDFC Bank in due course of time. This will be the merger of India’s largest housing finance company with the largest private bank.
PFRDA Approved on 11 November.
In its regulatory filing, HDFC bank said, “We would like to inform you that PFRDA vide its letter to HDFC Life dated November 11, 2022 has given its approval for the proposed change in shareholding of HDFC Life, the proposed amalgamation on account of the sponsor of HDFC Pension i.e. Change of promoter from HDFC Ltd. to HDFC Bank.”
The HDFC Bank-HDFC merger is subject to various statutory and regulatory approvals, including those from the NCLT and the respective equity shareholders of the bank and other companies involved in the scheme.
Under the scheme of arrangement, the subsidiaries of HDFC will become subsidiaries of HDFC Bank. In addition, shareholders of HDFC will receive 42 shares (of face value Rs 1 each) of HDFC Bank on the record date — for 25 shares (of face value each) held in HDFC 2). And then the equity shares held by HDFC in HDFC Bank will be liquidated as per the scheme.
HDFC is India’s leading housing finance company and has unmatched relationships, scale and deep underwriting expertise in the housing sector, built over several decades and economic cycles.
The HDFC Bank-HDFC merger is expected to create a larger balance sheet and net worth which will allow greater flow of credit into the economy. It will also enable underwriting of big ticket loans including infrastructure loans – an urgent need of the country.
Shares of HDFC Bank on Friday this week 1,610.95 each on the BSE, up 5.62%. Meanwhile, HDFC shares ended at 2,651.25 each is 5.84% higher.
In Q2FY23, HDFC Bank posted a net profit of 10,606 crore grew by 20% YoY, while Net Interest Income (NII) stood at 21,021 crore, an increase of 19%. Its gross NPAs went up to 1.23% in Q2FY23 and 1.28% in Q2FY22. Bank reports 23.4% YoY growth in total advances 1,479,873 crore, while total deposits grew by 19% 1,673,408 crores
Meanwhile, HDFC posted a net profit of Rs. 4,454. 24 crore in Q2FY23 registering a growth of 17.8% yoy, while NII came in 4,639 crore up by 12.9% YoY. In the half year ended September 30, 2022, 92% of HDFC’s new loan applications were received through digital channels. In addition, the average size of personal loans was 35.7 lakh as compared to 33.1 lakh in FY22. Also, the collection efficiency for personal loans remained above 99% on a cumulative basis during the quarter ended September 30, 2022. 6,90,284 crore till 30 September, 2022.
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