Mortgage leader HDFC announced Monday that it will merge with private lender HDFC Bank. “The share price ratio for the amalgamation of the Corporation (HDFC Ltd) with and in HDFC Bank will be 42 shares (credit if fully paid) of the nominal value of Re 1 each of HDFC Bank for every 25 fully paid-up shares of the nominal value of Rs 2 each from the Corporation, “HDFC said in a regulatory announcement.
“The merger is subject to the receipt of the necessary approval from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Competition Commission of India, the National Housing Bank (NHB), the “Insurance and Regulatory and Development Authority, the Pension Fund Regulatory and Development Authority, the National Company Law Tribunal, BSE Limited and the National Stock Exchange of India Limited and other legal and regulatory authorities, and the respective shareholders and creditors,” it added.
“HDFC Bank has access to lower cost funds through its high level of current and savings accounts (CASA). With the amalgamation, HDFC Bank will be able to offer more competitive housing products. The proposed transaction will result in reducing HDFC Bank’s share of exposure to non -secured loans, “the mortgage lender continued.
Deepak Parekh, HDFC chairman, said: “This is a fusion of equality. We believe the housing finance business is growing by leaps and bounds through the implementation of RERA, housing infrastructure status, government initiatives such as affordable housing for all, among others.”
Shares of HDFC twin (HDFC and HDFC Bank) zoomed 10.03 percent and 9.83 percent, respectively, in early deals.