The stock exchanges have given a green signal to the proposal of a merger of HDFC and its subsidiary HDFC Bank which is the biggest transaction in India’s corporate history. There has been no objection from any of the two banks.
HDFC bank while categorizing stated that the bank collected the observation letter on 2nd July mentioning ‘no adverse observations’ from BSE Limited and another observation letter stating ‘no objection’ from the National Stock Exchange Of India Limited. The bank further added that the schemes had statutory and regulatory approvals from the Reserve Bank of India, the Competition Commission of India, the National Company Law Tribunal, and their respective shareholders and creditors of those companies who are involved in the scheme.
On 4th April, HDFC Bank which is India’s largest private lender agreed to take charge of the domestic contract lender in an agreement that is valued at about USD 40 billion creating a financial services titan. The proposed body will have a combined benefit of around Rs 18lakh crore. The tie-up is to be completed by the second or third quarter of FY24.
HDFC Bank will be positively owned by 100% public shareholders and 41% will be owned by existing shareholders of HDFC. Every HDFC shareholder will get 42 shares of HDFC Bank 25 shares held.
BSE in an observation letter stated that the company is directed to disclose the details of all the actions taken by Sebi or any other regulator against any organization in the petition that will be filed before NCLT. It further added that the company must make sure that there will be no changes to the draft scheme except that are ordered by the regulators. It should be made without the particularly written consent of Sebi.
The market capitalization of HDFC Bank since 1st April was Rs 8.36 Lakh crore and that of HDFC is Rs 4.46 lakh crore. After the tie-up, the company will be twice the size of ICICI Bank.
