Key Points of HDFC and HDFC Bank NCDs Transfer:
- HDFC Bank and HDFC are set to merge in India’s biggest corporate deal.
- BSE and NSE have granted in-principle approval for the transfer of additional NCDs from HDFC to HDFC Bank.
- The proposed amalgamation is expected to be finalised by October-December 2023.
- The merger is valued at approximately $40 billion and will create a new financial services giant in India.
- HDFC Bank will be owned entirely by public shareholders after the merger.
- Existing HDFC shareholders will own 41% of HDFC Bank after the merger.
- Final approval from SEBI is required before the merger can go ahead.
- HDFC Bank has received approval for the merger of HDFC Investments and HDFC Holdings with parent HDFC Ltd, as well as the merger with Griha Pte, a foreign step-down subsidiary of HDFC Limited.
Details of HDFC and HDFC Bank NCDs Transfer:
HDFC Bank and HDFC, the two biggest names in the Indian mortgage sector, are all set to merge in what is being touted as India’s largest corporate deal. In a recent development, both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have granted their in-principle approval for the transfer of additional non-convertible debentures (NCD) from HDFC to HDFC Bank.
This is a crucial step towards the proposed amalgamation, which is expected to be finalised by the end of the current financial year, i.e., October-December 2023. The merger, which was agreed upon in April last year and is valued at approximately $40 billion, will create a new financial services giant in India, with a combined asset base of around ₹18 lakh crore.
After the merger, HDFC Bank will be owned entirely by public shareholders, while existing shareholders of HDFC will own 41% of the bank. For every 25 shares of HDFC that they own, HDFC shareholders will receive 42 shares of HDFC Bank.
However, before the merger can go ahead, it still requires final approval from the Securities and Exchange Board of India (SEBI), particularly with regards to the change in control of certain subsidiaries of HDFC Limited.
In related news, HDFC Bank recently received approval from the Monetary Authority of Singapore for the merger of HDFC Investments and HDFC Holdings with parent HDFC Ltd. Additionally, its wholly-owned subsidiary, Griha Pte, which is also a foreign step-down subsidiary of HDFC Limited, has received approval for the merger with HDFC Bank.
The merger of HDFC and HDFC Bank is a significant milestone in India’s financial sector, and its impact is likely to be felt for years to come.
About HDFC Bank:
Housing Development Finance Corporation Limited (HDFC), headquartered in Mumbai, is a leading private development finance institution in India. Its main focus is on providing housing finance, and it has a significant presence in the country’s banking, life and general insurance, asset management, venture capital, realty, education, deposits, and education loan sectors.
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