HDFC’s proposed merger with its banking subsidiary HDFC Bank, the largest transaction in Indian corporate history, has received stock exchange approval.
HDFC and HDFC Bank received no objections from either exchange.
HDFC Bank received a comment letter with “no adverse comments” from BSE Limited and a comment letter with “no objections” from the National Stock Exchange of India Limited, both dated July 2, 2022, HDFC Bank said. in a folder.
“The program remains subject to various legal and regulatory approvals, including approvals from the Reserve Bank of India, the Competition Commission of India, the National Company Law Tribunal and the respective shareholders and creditors of the companies involved in the program. , as needed. ,” It said.
Earlier on April 4, India’s largest private lender, HDFC Bank, agreed to take over the nation’s largest mortgage lender in a deal valued at around $40 billion, creating a financial services titan.
The proposed entity will have a combined asset base of approximately Rs 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.
Once the deal becomes effective, HDFC Bank will be 100% owned by public shareholders, and existing HDFC shareholders will own 41% of the bank.
Each HDFC shareholder will receive 42 HDFC Bank shares for every 25 shares held.
The BSE observation letter states that the company is advised to disclose details of any action taken by Sebi or any other regulator against any of the entities, its directors/promoters and its promoter group, in the petition to be filed with NCLT.
The company will ensure that no changes to the proposed plan, except those mandated by regulators or the courts, are made without Sebi’s specific written consent, it said.
The merged company is advised that proposed shares issued under the scheme must be in dematerialized form only, he said.
After the merger, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore, as of December 2021 balance sheet.
As of April 1, 2022, the market capitalization of HDFC Bank was Rs 8.36 lakh crore (USD 110 billion) and that of HDFC was Rs 4.46 lakh crore (USD 59 billion).
After the merger, HDFC Bank will be twice the size of ICICI Bank, which is currently the third largest bank.