Key Points of HDFC Bank Merger with HDFC:
- NCLT has approved the merger of HDFC Bank and HDFC.
- The merger was proposed last year in April, with the aim of enabling seamless delivery of home loans and leveraging the large customer base of over 68 million customers of HDFC Bank.
- The merger has received approvals from various regulatory bodies, including Reserve Bank of India, Securities and Exchange Board of India (SEBI), PFRDA, Competition Commission of India (CCI), and India’s stock exchanges BSE and NSE.
- NCLT has also given approval for holding a shareholders’ meeting to obtain approval for the proposed merger.
- The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of FY24.
- Post-merger, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC will own 41% of the former.
- The proposed merger aims to create a large balance sheet and net worth that would allow a greater flow of credit into the economy and enable the underwriting of larger ticket loans, including infrastructure loans, which is an urgent need of the country.
- The combined entity will bring together complementary strengths of the two organizations, enabling a rewarding customer relationship, with HDFC Bank’s customers being offered mortgages as a core product in a seamless manner.
Details of HDFC Bank Merger with HDFC:
HDFC and HDFC Bank Merger Approved by National Company Law Tribunal
In a recent development, the National Company Law Tribunal (NCLT) has approved the merger of HDFC and HDFC Bank. The merger was proposed last year in April, with the aim of enabling seamless delivery of home loans and leveraging the large customer base of over 68 million customers of HDFC Bank.
The merger has received approvals from various regulatory bodies, including Reserve Bank of India, Securities and Exchange Board of India (SEBI), PFRDA, Competition Commission of India (CCI), and India’s stock exchanges BSE and NSE. NCLT has also given approval for holding a shareholders’ meeting to obtain approval for the proposed merger.
The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of FY24. Post-merger, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC will own 41% of the former.
The proposed merger aims to create a large balance sheet and net worth that would allow a greater flow of credit into the economy. It will also enable the underwriting of larger ticket loans, including infrastructure loans, which is an urgent need of the country.
HDFC Bank, with its vast customer base of over 68 million customers, 6,342 branches, and a full suite of credit, liability, and distribution offerings, is the leading private sector bank with deep relationships, insights, and understanding of its customers built over multiple decades.
HDFC is India’s premier housing finance company and has unrivaled relationships, scale, and deep underwriting expertise in the housing sector, built over multiple decades and across economic cycles.
The combined entity will bring together complementary strengths of the two organizations, enabling a rewarding customer relationship. Post-merger, HDFC Bank’s customers will be offered mortgages as a core product in a seamless manner. HDFC Bank will also leverage the long tenor mortgage relationship to offer varied credit and deposit products enabled through better insights throughout the customer life-cycle, as per the regulatory filing on April 4.
On Friday, HDFC Bank shares closed at ₹1,572.55 apiece on BSE, up 1.36%, while HDFC finished at ₹2,577.45 apiece, up 1.81%. The merger is expected to lead to an improved pace of credit growth in the economy and underwriting of larger ticket loans, including infrastructure loans, which is the need of the hour.
About HDFC Bank:
HDFC was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. HDFC Bank is a publicly held banking company, the bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. It is engaged in providing a range of banking and financial services including retail banking, wholesale banking and treasury operations. It is promoted by HDFC Ltd. which has 19.32% stake as on September 30, 2020. Currently, HDFC Bank Ltd. (HBL) is the largest private sector bank in India.
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