RBI gives green signal to HDFC, HDFC Bank merger proposal – Times of India

New Delhi: HDFC bank said on Monday that it has received the approval of banking sector regulator RBI for its original merger proposal HDFC Ltd with myself.
In what is touted as the biggest transaction in India’s corporate history, HDFC Bank on April 4 agreed to take on the largest home mortgage lender in a deal worth nearly $40 billion to create a financial services titan.
“HDFC Bank has received a letter dated July 4, 2022 from the Reserve Bank of India (RBI) whereby RBI has given ‘No Objection’ to the scheme, subject to certain conditions,” the bank said in a regulatory filing. filing.
The merger proposal is subject to various statutory and regulatory approvals, including: Competition Commission of India (CCI), the National Company Law Tribunal (NCLT), other applicable authorities and the concerned shareholders and creditors of the companies, it said.
Earlier this week, the proposed merger got approval from both stock exchanges – BSE and NSE.
The combined asset base of the proposed unit will be around 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 goes into effect, HDFC Bank will be 100 percent owned by public shareholders, and existing shareholders of HDFC will hold 41 percent of the bank.
Each HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares.
BSE’s observation letter said that the company is advised to disclose the details of all actions taken by SEBI or any other regulator against any entity, its directors/promoters and promoter group in the petition to be filed before NCLT. Is given.
The company shall ensure that no changes are made to the draft scheme except as mandated by regulators or tribunals without the specific written consent of SEBI.
It added that the amalgamated company is advised that the equity shares proposed to be issued under the scheme should compulsorily be in demat form only.
After the merger, as per the balance sheet of December 2021, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore.
As of April 1, 2022, the market capitalization of HDFC Bank was Rs 8.36 lakh crore ($110 billion) and that of HDFC was Rs 4.46 lakh crore ($59 billion).
After the merger, HDFC Bank will be double the size of ICICI Bank, which is now the third largest lender.