HDFC Bank on Friday said it has received the approval of pension fund regulator PFRDA for a proposal to merge its parent HDFC Ltd with itself.
In what is touted as the biggest transaction in India’s corporate history, HDFC Bank on April 4 agreed to take on the largest home mortgage lender in a deal worth around USD 40 billion to create a financial services titan.
The Pension Fund Regulatory and Development Authority (PFRDA) vide its letter dated 7th July, 2022 (received by us on 15th July, 2022) has notified the PFRDA (Point of Attendance) Regulations, 2018, 2018 for change in status/constitution as per the scheme. subject to the conditions mentioned therein,” HDFC Bank said in a regulatory filing.
The merger proposal is subject to various statutory and regulatory approvals including Competition Commission of India (CCI), National Company Law Tribunal (NCLT), other applicable authorities and the concerned shareholders and creditors of the companies.
The proposed merger has already received approval from both the stock exchanges BSE and NSE and the Reserve Bank of India (RBI).
The combined asset base of the proposed unit would be around Rs 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.
Once the deal takes effect, HDFC Bank will be 100 percent owned by public shareholders, and existing shareholders of HDFC will hold 41 percent of the bank. Each HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares.
BSE’s observation letter said that the company is advised to disclose the details of all actions taken by SEBI or any other regulator against any entity, its directors/promoters and promoter group in the petition to be filed before NCLT. Is given.
The Company shall ensure that no changes are made to the Draft Scheme except as mandated by the regulators or tribunals without the specific written consent of SEBI.
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It added that the amalgamated company is advised that the equity shares proposed to be issued under the scheme should compulsorily be in demat form only.
After the merger, as per the balance sheet of December 2021, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore.
As of April 1, 2022, the market capitalization of HDFC Bank was Rs 8.36 lakh crore ($110 billion) and that of HDFC was Rs 4.46 lakh crore ($59 billion). After the merger, HDFC Bank will be double the size of ICICI Bank, which is now the third largest lender.