HDFC-HDFC Bank merger gets PFRDA approval

The Reserve Bank of India, the BSE and NSE of India, as well as the Pension Fund Regulatory and Development Authority, all approved the proposed merger of HDFC with its banking subsidiary HDFC Bank (PFRDA). This transaction is regarded as the biggest in India’s corporate history. 
 
In a regulatory filing made public on Friday, Housing Development Finance Corporation Ltd. (HDFC) declared that it had received PFRDA approval. In accordance with its decisions, the HDFC Limited Board of Directors approved the merger.

The company informed the exchanges that HDFC Limited received approval from PFRDA today, or on July 8, 2022, regarding a change in its status or constitution in accordance with the Scheme and the PFRDA Regulations, 2018, subject to the stipulation that the services provided to NPS subscribers associated with HDFC Limited will not be impacted by the Scheme. 
 
In a deal valued at around $40 billion earlier on April 4, India’s largest private lender HDFC Bank and the nation’s largest mortgage lender, HDFC Ltd, agreed to merge to form a financial services behemoth. 
 
The anticipated business’s total asset base will be close to Rs 18 lakh crore. The merger is scheduled to be completed by the second or third quarter of FY24, depending on regulatory approvals. 
 
Existing HDFC shareholders will hold 41% of the bank’s shares once the agreement is in place, making public shareholders the only owners of HDFC Bank.

HDFC Bank

According to the observation letter from the BSE, the company is required to include information on all measures taken by Sebi or any other regulator against any of its entities, directors, promoters, or promoter group in the petition that will be submitted to the NCLT. 
 
The corporation is obligated to ensure that the proposed scheme may only be amended if needed by courts or regulatory agencies.

The proposed equity shares issued under the scheme, according to the amalgamated firm, should be required to be in dematerialized form alone, it added. 
 
As of December 2021’s balance sheet, the combined balance sheet will be Rs 17.87 lakh crore and the net value will be Rs 3.3 lakh crore. 
 
Market capitalization for HDFC Bank was Rs 8.36 lakh crore ($110 billion) as of April 1, 2022, and for HDFC it was Rs 4.46 lakh crore ($59 billion).