Mumbai: The Board of Directors of HDFC Ltd and HDFC Bank on Monday approved a proposal for the merger of the two leading financial institutions in the country.
Addressing a joint press conference with the top executives of HDFC Bank, Deepak Parekh, Chairman of HDFC said several regulatory approvals are required to complete the process of merger of HDFC and HDFC bank.
He further added, “It will take about 15 to 18 months. We are quite hopeful that the merger will get the approvals from the regulators.”
As per the terms of the deal, shareholders of HDFC Ltd will receive 42 shares of HDFC Bank for 25 shares held. Existing shareholders of HDFC Ltd will own 41 percent of HDFC Bank.
“The share exchange ratio for the amalgamation of the corporation with and into HDFC Bank shall be 42 equity shares ( credited as fully paid up) of the face value of Re 1 each of HDFC Bank for fully paid up early equity shares of the face value of Rs 2 each for the corporation”, HDFC said in the regulatory filing.
Parekh further added, “Only after attaining all the approvals by RBI, SEBI, and such other regulatory approvals, the merger will become effective.”
Post the merger, HDFC Bank will be 100 percent owned by public shareholders and existing shareholders of HDFC limited will own 41 percent of HDFC Bank.
The appointed date of amalgamation of HDFC Limited with and into HDFC Bank shall be the end of the day immediately preceding the effective date of the scheme.