Parent HDFC to merge with HDFC Bank
The Hindu
Deal to create financial behemoth with assets exceeding ₹27.24 lakh cr.
Mortgage lender HDFC Ltd. and India’s largest private sector bank HDFC Bank Ltd. on Monday announced that their respective boards had approved an all stock amalgamation that would see the latter’s parent merge itself with the bank to create a financial behemoth with combined assets of about ₹27.24 lakh crore (as of September 2021).
Shareholders of HDFC would receive 42 shares of HDFC Bank (each of face value ₹1) for 25 shares held in the mortgage lender (each of face value ₹2), and the equity share (s) held by HDFC in HDFC Bank would be extinguished as per the scheme.
The proposed merger is subject to approvals from regulators including the RBI and IRDA and would take about 12 to 18 months to complete, top executives of both entities said at a press conference.
HDFC chairman Deepak Parekh said he would not be on the bank’s board post merger as he was already above 75.
The housing finance major’s vice chairman and CEO Keki Mistry who is 67, would join the board of the bank and be on it for about a-year-and-a-half and was likely to oversee the mortgage department and investor relations, he added.
“We will not be thrown out as this is not a hostile merger,” Mr. Parekh said. “The son [HDFC Bank] has grown older and is acquiring the father’s [HDFC’s] business,” he remarked.