HDFC Bank said on Monday that its board approved the merger of HDFC Investments and HDFC Holdings with Housing Development Finance Corporation Limited or HDFC Limited and amalgamation of HDFC Limited into HDFC Bank. “The board of directors of HDFC Bank has also accorded approval for the execution of an implementation agreement between HDFC Limited and HDFC Bank, which inter alia sets out the manner of implementing the proposed transaction contemplated under the scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties in relation to the proposed transaction,” the bank said in a BSE filing.
The share exchange ratio for the amalgamation of HDFC Limited with and into HDFC Bank shall be 42 equity shares (credited as fully paid up) of face value of Re 1 each of HDFC Bank for every 25 fully paid-up equity shares of face value of Rs 2 of HDFC Limited.
As a result of this, upon the scheme becoming effective, HDFC Bank will be 100 per cent owned by public shareholders and existing shareholders of HDFC Limited will own 41 per cent of HDFC Bank.
HDFC, HDFC Bank Merger to Help HDFC Bank, Know How
The proposed transaction, shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base, the bank said in BSE filing. “It will also create meaningful value for various stakeholders as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, amongst others,” HDFC added in the exchange filing.
“HDFC Bank would benefit from a larger balance sheet and networth which would allow underwriting of larger ticket loans and also enable a greater flow of credit into the Indian economy,” the bank added.
The Scheme is subject to the receipt of requisite approvals from the Reserve Bank of India (“RBI”), Securities and Exchange Board of India (“SEBI”), the Competition Commission of India, the National Housing Bank (“NHB”), the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory and Development Authority, the National Company Law Tribunal, SSE Limited and the National Stock Exchange of India Limited (collectively, the “Stock Exchanges”) and other statutory and regulatory authorities, and the respective
shareholders and creditors, under applicable law.
The HDFC twins has a market-cap of Rs 13,83,498.26 crore beating that of TCS’ 13,75,071.51 crore market value. HDFC has total assets of Rs 6,23,420.03 crore, turnover of Rs 35,681.74 and net worth of Rs 1,15,400.48 crore as on December 31, 2021. HDFC Bank has total assets of Rs 19,38,285.95 crore, turnover (includes other income) of Rs 1,16,177.23 crore for the nine months ended December 31, 2021, and net worth of Rs 2,23,394.00 crore, as on December 31 , 2021.
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