The amalgamation scheme of HDFC Bank-HDFC gets a go-ahead from the stock exchanges BSE, and NSE. With this approval, they are now a step closer to executing their merger. HDFC Bank from the Bombay Stock Exchange (BSE) has received a letter of observation with ‘no adverse observations’ and a letter with ‘no objection’ from the National Stock Exchange (NSE), which were both dated July 02, 2022, which is respect to the proposed scheme of amalgamation of “(i) HDFC Investments and HDFC Holdings, wholly-owned subsidiaries of Housing Development Finance Corporation (HDFC), with and into HDFC and (ii) HDFC with and into HDFC Bank.”
HDFC, HDFC Bank Merger
HDFC-HDFC Bank has submitted a separate regulatory filing which said, “The Scheme remains subject to various statutory and regulatory approvals inter alia including approvals from the Competition Commission of India, Reserve Bank of India, the National Company Law Tribunal, and the respective shareholders and creditors of the companies involved in the Scheme, as may be required.”
On April 4, HDFC Bank announced that by merging with the parent HDFC they would be able to offer seamless home loan facilities and other leverage facilities to the large base of over 68 million customers the bank along with improving the credit growth in the economy.
You should know that after this merging process completes the HDFC, HDFC bank will become one of the largest banks in the world. This corporate deal is worth ₹4.53 lakh cr, which will become the second-largest we have so far in 2022. The process is so long that it will take the second or third quarter of the fiscal year 2024 for HDFC, and HDFC bank to merge.
After The Completion
When the merger is completed the public shareholders will own a hundred per cent of HDFC Bank. At the same time, the existing customers of HDFC will get 41 per cent of the HDFC bank. Meaning that HDFC will get a 41 per cent stake in the bank through this amalgamation process.
“Merger of equals” is termed by the HDFC Chairman Deepak Parekh when announcing the process and also, pointed out the strict RBI restrictions over Non-Banking Finance Companies to be the primary reason for this merger.