HDFC Ergo Becomes Subsidiary of HDFC Ltd After Acquisition
In an exciting development, HDFC Ltd announced on Friday its acquisition of an additional 0.5097 percent stake in HDFC Ergo, resulting in the latter becoming a subsidiary of HDFC Ltd.
According to a regulatory filing, HDFC Ltd purchased 36,42,290 equity shares of HDFC Ergo, accounting for 0.5097 percent of its total issued and paid-up share capital. The shares were acquired from ERGO International AG, the other promoter involved.
Following this acquisition, HDFC Ltd now holds a controlling 50.50 percent of the total paid-up share capital of HDFC Ergo. Consequently, HDFC Ergo officially becomes a subsidiary of HDFC Ltd.
This move is a part of the ongoing reverse merger process between HDFC Ltd and its banking subsidiary, HDFC Bank, set to commence on July 1.
In light of this development, the Reserve Bank of India (RBI) had granted permission for the transfer of HDFC Ltd’s shareholding in HDFC Ergo to HDFC Bank. Furthermore, the RBI advised that either HDFC Ltd or HDFC Bank should increase their shareholding in the general insurance company to over 50 percent before the effective date of the merger scheme.
About HDFC:
Housing Development Finance Corporation Limited (HDFC) was a leading Indian mortgage lender located in Mumbai. It held the position of the largest housing finance company in India and had a diverse range of services, including banking, life and general insurance, asset management, venture capital, and deposits, provided through its associate and subsidiary companies.
About HDFC Ergo:
HDFC ERGO is a company formed through a 51:49 joint venture between HDFC and ERGO International AG. ERGO International AG is one of the insurance entities of the Munich Re Group in Germany and operates in the insurance sector under BFSI (Banking, Financial Services, and Insurance). HDFC ERGO specializes in providing a comprehensive range of general insurance products for retail, corporate, and rural sectors.
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