The HDFC and HDFC Bank merger proposal is still awaiting a number of legal and regulatory approvals. On Monday, HDFC Bank announced that the RBI has approved its parent company HDFC Ltd.’s petition to merge with itself.
A $40 billion deal between HDFC Bank and the largest domestic mortgage lender was announced on April 4 and is being hailed as the largest transaction in corporate history of India. This will create a financial services behemoth.
According to a regulatory filing by the bank, “HDFC Bank has received a letter dated July 04, 2022 from the Reserve Bank of India whereby the RBI has awarded its “no objection” for the Scheme, subject to certain restrictions as indicated therein.”
According to the statement, the merger proposal is still pending approval from a number of statutory and regulatory bodies, including the National Company Law Tribunal (NCLT), the Competition Commission of India (CCI), and other relevant agencies as well as the respective shareholders and creditors of the two companies. Both the BSE and NSE stock exchanges approved the proposed merger earlier this week. The aggregate asset base of the proposed business will be close to Rs 18 lakh crore. Depending on regulatory permissions, the merger is anticipated to be finished by the second or third quarter of FY24.
Advertisement Once the agreement is in place, existing HDFC shareholders will own 41% of the bank, making public shareholders the sole owners of HDFC Bank. For every 25 HDFC shares held, each shareholder will receive 42 HDFC Bank shares. The company is instructed to provide information on all actions taken by Sebi or any other regulator against any of the entities, its directors, promoters, and promoter group, in the petition that will be submitted to the NCLT, according to the observation letter from the BSE.
Advertisement The corporation must make sure that only amendments required by courts or regulatory bodies may be made to the proposed scheme, according to the statement.
The planned equity shares issued under the scheme are to be required to be in dematerialized form exclusively, it said, and the amalgamated business has been told of this. As of the December 2021 balance sheet, the combined balance sheet will be worth Rs 17.87 lakh crore, and the net worth will be Rs 3.3 lakh crore. Market capitalization of HDFC Bank was Rs. 8.36 lakh crore (USD 110 billion) as of April 1, 2022, and that of HDFC was Rs. 4.46 lakh crore (USD 59 billion)
