According to a regulatory statement on Monday, premier housing finance provider Housing Development Finance Corporation (HDFC) would merge with HDFC Bank, India’s largest private lender.
HDFC announced that its board of directors had authorized the merger of HDFC Investments Limited and HDFC Holdings Limited, which are wholly owned subsidiaries of HDFC, with HDFC Bank Limited.
By the second or third quarter of FY24, the HDFC-HDFC Bank merger should be complete. Following the merger, public shareholders would own 100% of HDFC Bank, while existing HDFC Limited shareholders will own 41% of HDFC Bank.
The Proposed Transaction, according to HDFC, will allow the bank to expand its home loan portfolio and expand its existing customer base.
HDFC Bank stated in a filing on Monday that the proposed merger will be subject to several regulatory clearances, including those from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi).
The proposed agreement will have a share exchange ratio of 42 HDFC Bank equity shares for every 25 HDFC Ltd equity shares.
