Hdfc bank and hdfc ltd merger

The merger of India’s most valuable lender and the nation’s largest mortgage financier to create what could be the world’s fifth-most valuable bank is inching closer to completion, with just one key step remaining that investors are watching for closely. Announcement of the so called ‘record date’— or the cut-off day set for investors — for the swapping of shares of Housing Development Finance Corp. for HDFC Bank Ltd. is expected within three weeks. The merged entity is likely to trade under the HDFC Bank ticker before July 20, bringing an end to the process that began in April 2022.

The merger of HDFC into HDFC Bank is likely to create the third-largest entity in India in terms of market capitalisation. In an exchange filing, HDFC announced that the company will merge itself with HDFC Bank following a union of subsidiaries HDFC Holdings and HDFC Investments. A similar announcement was made by HDFC Bank in a separate exchange filing. “The proposed transaction would create meaningful value for various stakeholders including respective shareholders, customers, employees, as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency, and the ability to drive synergies across revenue opportunities,” HDFC said in an exchange filing. HDFC said that its shareholders will get 42 shares of HDFC Bank for every 25 shares of the non-banking lender held by them. Based on the market capitalisation of HDFC and HDFC Bank as of April 1, the market value of the merged entity will be close to Rs 12.8 lakh crore. HDFC said that it will hold a 41 percent stake in the merged entity. HDFC Bank soared nearly 9 percent while HDFC jumped close to 10 percent following the announcement. “This is a merger of equals. Over the last few years, various regulations for banks and NBFCs have been harmonised, thereby enabling the potential merger,” Deepak Parekh, chairman of HDFC said in a press statement. Analysts suggested that the merger will create the biggest stock in terms of weight in the Nifty50 index, easily surpassing Relia...

MUMBAI, April 4 (Reuters) - India's largest private lender HDFC Bank HDFC Bank's deal with housing finance firm HDFC Ltd It will also help HDFC Bank shrink the gap with state-run lender and bigger rival State Bank of India The deal will be beneficial for both companies but particularly HDFC Ltd, said Asutosh Mishra, research analyst at Ashika Stock Broking. "(HDFC Ltd) was competing with the likes of State Bank of India in a competitive home loan market, leading to pressure on margins due to disadvantages to its cost of funds," he said. Following a 2018 crisis in the non-banking finance sector that shook India's financial system, the central bank issued guidelines in November allowing well-run large shadow lenders to be converted into banks. HDFC Bank shares closed 10% higher on Monday, giving the firm a market value of 9.18 trillion rupees ($121.66 billion), while HDFC Ltd surged 9.3% to a valuation of 4.85 trillion rupees. HDFC Ltd shareholders will receive 42 shares of the bank for 25 shares held, giving them ownership of 41% of HDFC Bank, which will become a full-fledged public company as the housing finance company's stake in the lender will be cancelled in the deal. Foreign ownership will account for 65-67% of the merged company, giving foreign investors scope to buy up to a further 8%, something that had also helped lift the share price, said Siddharth Purohit, fund manager at InvesQ Investment Advisors. "The value of HDFC Ltd is $60 billion. If you strip off the po...

The board of directors of HDFC have approved the merger of India’s largest housing finance firm HDFC (Housing Development Finance Corporation) with India’s largest private sector bank HDFC Bank, the company said. The deal is expected to build the bank’s housing loan portfolio and enhance its existing customer base. Under the proposed agreement, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC Limited will own 41% of stake in HDFC Bank. For every 25 equity shares held by HDFC shareholders, they will receive 42 equity shares of the combined company per the share exchange ratio. On Monday, shares of HDFC Bank rose 14% on the benchmark indices while shares of HDFC jumped over 16% on NSE Nifty and BSE Sensex. “The proposed transaction is to create a large balance sheet and net-worth that would allow greater flow of credit into the economy. It will also enable underwriting of larger ticket loans, including infrastructure loans — an urgent need of the country,” the company said. Bajaj Housing Finance extends home loan tenure to 40 years “This is a merger of equals,” Deepak Parekh, Chairman of HDFC Limited, said. “We believe that the housing finance business is poised to grow in leaps and bounds due to the implementation of RERA, infrastructure status to the housing sector, government initiatives like affordable housing for all, amongst others. Over the last few years, various regulations for banks and NBFCs have been harmonised, thereby enabl...

The merger of India’s most valuable lender and the nation’s largest mortgage financier to create what could be the world’s fifth-most valuable bank is inching closer to completion, with just one key step remaining that investors are watching for closely. Announcement of the so called ‘record date’ — or the cut-off day set for investors — for the swapping of shares of Housing Development Finance Corp. for HDFC Bank Ltd. is expected within three weeks. The merged entity is likely to trade under the HDFC Bank ticker before July 20, bringing an end to the process that began in April 2022. The merger is unprecedented in India, creating a bank worth $168 billion and impacting over tens of millions of customers and shareholders across the two companies apart from group insurance and asset management businesses. A central team, with 3 members from each company, and nearly three dozen committees worked on a business integration plan. Meanwhile, legal approvals were sought from shareholders, banking, securities market and competition regulators as well as stock exchanges with the final nod granted by the company law tribunal in March. The approvals got done in good time and the integration of technology platforms is at an advanced stage, Keki Mistry, chief executive officer of the mortgage lender told Bloomberg News last week. “The target is for the merger to be effective early July,” he said. Final Step Once the merger is effective, a cut-off date will be announced to determine HDF...

HDFC on Wednesday said the effective date of sthe merger with HDFC Bank will occur only after all approvals are obtained by both the entities. “The coming into effect of the scheme, that is the effective date, shall occur only after all requisite consent, approvals and permissions are obtained by both, the Corporation and the HDFC Bank,” the company said in a stock exchange filing. The legal advisors to the transaction have indicated that obtaining all the approvals could take 15 to 18 months, it further said, adding: “The scheme and proposed transaction is subject to receipt of requisite approvals from various regulatory and statutory authorities and respective shareholders and creditors, under the applicable law.” On the effective date, all outstanding liabilities, contingent liabilities, debts, loans (outstanding liabilities) of HDFC will be transferred to HDFC Bank on the same terms and conditions as were applicable to the Corporation, HDFC said. HDFC Bank will meet, discharge and satisfy its duties and obligations pertaining to the transfer and vesting of all outstanding liabilities of the Corporation on the effective date and it shall not be necessary to obtain any further consent of any third party or other person who is a party to any contract or arrangement by virtue of which such liabilities have arisen. “Till the effective date, the Corporation, as an independent entity, shall carry on business in the ordinary course as an NBFC-HFC,” HDFC said, adding that it wi...