HDFC Bank has announced long-awaited merger of HDFC twins — HDFC Bank and mortgage lender HDFC. The proposed merger will help the private lender to build its housing loan portfolio and enhance its existing customer base. The biggest beneficiary of this merger of will be HDFC Bank customers, said Deepak Parekh, chairman of HDFC Bank.
The HDFC-HDFC Bank merger will mitigate single product risk, enhance diversity of assets of combined entity. The combined entity will be in a position to offer mortgage products seamlessly vs current assignment route, said Parekh added.
Parekh mentioned that Reserve Bank of India (RBI) for a phased-in approach regarding SLR, CRR, PSL.
“The board Housing Development Finance Corporation (HDFC) Limited on Monday announced that its board has approved a composite scheme of amalgamation, for the merger of into and with HDFC Limited into HDFC Bank, and their respective shareholders and creditors. This was a long awaited gesture from the company and by the share holders. This merger will create a long term welath for the companies shareholder. The amalagamation ratio is 25/42. That is if you have 25 fully paid equity shares if HDFC Ltd. of Face Value 2 each you will get 42 Shares of HDFC Bank Ltd. fully paid equity shares if Face Value 1 each. Upon the Scheme becoming effective, HDFC Bank will issue equity shares to the shareholders of HDFC Limited as on the record date. The equity share(s) held by HDFC Limited in HDFC Bank will be extinguished as per the Scheme. The Boards of both the companies believe that the merger will create long-term wealth for all stakeholders, including customers, employees and shareholders of both entities,” said Sudhanshu Singh, Director IBBM, Moneymakers India Securities.
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