HDFC Bank and parent HDFC move closer to the merger process as stock exchanges give a thumbs up to their amalgamation plan. The companies received ‘observation papers’ from stock exchanges, BSE and NSE on July 2.
Both HDFC bank and HDFC has received ‘No Adverse Comment’ from BSE and ‘No Objection’ from National Stock Exchange of India (NSE).
In its separate regulatory filing, HDFC Bank and HDFC “The Scheme is subject to various statutory and regulatory approvals including, inter alia, approvals from the Competition Commission of India, Reserve Bank of India, National Company Law Tribunal, and the respective shareholders and creditors of the companies involved in the Scheme, as may be deemed necessary.” be needed.”
Earlier on April 4, HDFC Bank had announced that it would merge with the parent HDFC Bank to enable seamless delivery and leverage of home loans across HDFC Bank’s massive base of over 68 million customers and would inter-alia- It will also improve the pace of credit growth in the economy.
The proposed merger is meant to create a larger balance sheet and net worth that would allow greater flow of credit into the economy. It will also enable underwriting of big ticket loans including infrastructure loans, urgent requirement of the country.
Under this scheme, HDFC shareholders will receive 42 shares of HDFC Bank with a face value of Re 1 each for 25 shares of HDFC. 2 each. In addition, HDFC’s stake in HDFC Bank will cease to exist as per the amalgamation plan.
After the merger, HDFC Bank will be 100% owned by the public shareholders and existing shareholders of HDFC will hold 41% of the former.
HDFC Bank, with over 68 million customers, 6,342 branches and a full suite of credit, liability and distribution offerings, is a leading private sector bank with deep relationships, insight and understanding of its customers built over several decades.
HDFC is India’s leading housing finance company and built over several decades and economic cycles, the housing sector has unmatched relationships, scale and deep underwriting expertise.
The combined entity will bring together the complementary strengths of both the organizations, enabling a rewarding customer relationship. Post the combination, HDFC Bank customers will be offered mortgage in a seamless manner as a flagship product. HDFC Bank will also leverage the long-term mortgage relationship to offer a variety of credit and deposit products enabled through better insights into the customer life-cycle, according to a regulatory filing on April 4.
The merger is expected to be completed within 18 months.
HDFC Bank shares closed on BSE on Friday last week 1,353.65 up 0.46% each. ended on hdfc 2,210.65 each, up 2.18%.