HDFC Bank will merge with HDFC following the union of its subsidiaries HDFC Holdings and HDFC Investments, subject to approvals from government agencies, stock exchanges, and other regulatory authorities
A HDFC Bank branch in Hyderabad. (Credit: Adbh266/Wikipedia)
HDFC Bank announced that its board of directors has approved a scheme of amalgamation for the merger of Housing Development Finance Corporation (HDFC Limited).
In its exchange filing, HDFC Bank stated that it will merge with HDFC following the union of its subsidiaries HDFC Holdings and HDFC Investments.
Under the terms of the agreement, HDFC shareholders are expected to receive 42 HDFC Bank shares of face value INR1 each, for every 25 HDFC shares of face value INR2.
The merger is subject to approvals from certain government bodies, stock exchanges, other regulatory authorities, and the respective shareholders and creditors.
The government organisations include the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), the Competition Commission of India, and the National Housing Bank (NHB), among others.
Upon closing of the merger, HDFC Bank will be 100% owned by public shareholders, where existing shareholders of HDFC will have a 41% stake in HDFC Bank.
HDFC Bank, in a statement, said: “The board of directors of HDFC Bank has also accorded approval for the execution of an implementation agreement between HDFC Limited and HDFC Bank.
“As per the Scheme, the appointed date for the amalgamation of HDFC Limited with and into HDFC Bank shall be the effective date of the Scheme.
“Further, the appointed date for amalgamation of HDFC Investments Limited and HDFC Holdings Limited with and into HDFC Limited shall be the end of the day immediately preceding the effective date of the Scheme.”
In December last year, India Post Payments Bank (IPPB) has selected HDFC Bank to provide the unbanked and underserved customers in semi-urban and rural areas in India, with banking products and services.
The two have signed a memorandum of understanding, which is expected to benefit more than 47 million IPPB customers, with 90% of them staying in rural areas.
Through the partnership, IPPB will be enabled to provide diversified offerings, including access to finance, to its customers through its Doorstep Banking Service, said HDFC Bank.