Leading housing finance company Housing Development Finance Corporation (HDFC) will merge into HDFC Bank which is India’s leading private lender, according to a regulatory filing on Monday.
HDFC on Monday said that its board has approved the merger of its wholly owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited.
The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of FY24. After the merger, 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 said the Proposed Transaction shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base.
The scheme of amalgamation will be subject to various regulatory approvals, including from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), HDFC Bank said in the filing on Monday.
Under the proposed deal, share exchange ratio will be 42 equity shares each of HDFC Bank for every 25 equity shares held in HDFC Ltd.
“… after considering the recommendation and report of the Audit Committee and the Committee of Independent Directors, the Board of Directors of HDFC Bank, at its meeting held on April 4, 2022 approved a composite scheme of amalgamation HDFC Investments and HDFC Holdings, into and with Housing Development Finance Corporation Limited (HDFC Ltd); and HDFC Ltd into HDFC Bank, and their respective shareholders and creditors,” the filing said.