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India set for $168 billion finance behemoth as HDFC merger nears

HDFC merger

HDFC merger – The merger of India’s most valued lender with the country’s top mortgage financier to form what could be the world’s fifth-most valuable bank is nearing completion, with only one major step remaining that investors are eagerly watching.

Within three weeks, the’record date’ — or the cut-off day established for investors — for the swapping of shares of Housing Development Finance Corp. for HDFC Bank Ltd. will be announced. The merged business is expected to trade under the HDFC Bank ticker by July 20, bringing an end to the process that began in April 2022.

HDFC merger

The merger is unique in India, creating a bank worth $168 billion and affecting tens of millions of clients and stockholders across the two corporations, aside from group insurance and asset management operations.

A core team with three members from each organisation and over three dozen committees worked on a business integration plan. Meanwhile, legal approvals were sought from shareholders, banking, securities market, and competition agencies, as well as stock exchanges, with the company law tribunal providing the final approval in March.

The clearances were completed on time, and the integration of technology platforms is well underway, according to Keki Mistry, the mortgage lender’s chief executive officer, who spoke to Bloomberg News last week. “The merger is scheduled to go into effect in early July,” he stated.

Inside A Housing Development Finance Corporation Ltd. Bank Branch And Chief Executive Officer Keki Mistry Interview with Keki Mistry, CEO of Housing Development Finance Corporation.

According to the new Nifty Indices guidelines, HDFC will be excluded from any index on the ex-date, and the value of HDFC Bank will be adjusted. Previously, corporations were excluded from the index at the start of the merger process. This quickly altered with the news of the HDFC merger, as the two financial behemoths are among the top five constituents of the benchmark National Stock Exchange’s Nifty50 by weightage. Inquiries about the exclusion were not addressed in the exchange.