HDFC and HDFC Bank Merger News: Another key turning point in Indian corporate history is imminent. HDFC Limited Mortgage lender to merge with private banking giant HDFC Bank. HDFC Ltd said in a statement on Monday that all its board members had agreed to the same.
There will be a merger of HDFC and HDFC Bank. After the merger, HDFC will have 41 percent stake in HDFC Bank.
HDFC and HDFC Bank Merger News
HDFC Investments Limited and HDFC Holdings Limited, two subsidiaries of HDFC Bank, will be merged into HDFC Bank Limited. However, the merger has to be approved by other regulatory bodies, including public sector undertakings such as SEBI, CCI and RBI.
The merger process of HDFC companies is likely to be completed by the 2023-24 financial year. Otherwise the merger is expected to be completed by the second or third quarter of the same financial year.
Following the news of the merger of HDFC Bank, the share price of the company rose sharply. Shares of HDFC Bank and HDFC Ltd gained 15 per cent.
The company has given this information on Monday. Under this deal, HDFC Bank will be 100% owned by public shareholders. Whereas the existing shareholders of HDFC Limited will have 41 percent stake in HDFC Bank.
What will HDFC shareholders get
After the news of this deal, there has been a great rise in the shares of HDFC and HDFC Bank. If the share of HDFC Bank strengthened by more than 10 percent, then HDFC has also seen a rise of about 10 percent. HDFC shareholders will get 42 equity shares as per share exchange ratio in the combined company for every 25 equity shares.
HDFC Bank Chairman Atanu Chakraborty says that the combined company will benefit from HDFC Limited’s product and market leadership in the housing finance business and HDFC Bank’s distribution and customer leadership. He called it a positive step. He says that the aim of the government is to give houses to all. This is an effective step in this direction.