HDFC Ltd, HDFC Bank Ltd. boards approve merger

HDFC Bank Ltd. on Friday announced the completion of merger of Housing Development Finance Corporation Ltd. (HDFC) with itself, following the receipt of all requisite shareholder and regulatory approvals. 

Both the entities had announced a decision to merge on April 4, 2022.

The Boards of both the companies at their respective meetings held separately on Friday noted that the merger would be effective from July 1, 2023. 

Pursuant to the share exchange ratio as per the merger scheme, HDFC Bank will issue and allot to eligible shareholders 42 new equity shares of the face value of ₹ 1 each, credited as fully paid-up, for every 25 equity shares of the face value of ₹2 each fully paid-up held by such shareholder in HDFC Ltd. as on the Record Date i.e., July 13, 2023.

Sashi Jagdishan, CEO & MD, HDFC Bank said, “This is a defining event in our journey and I am confident that our combined strength will enable us to create a holistic ecosystem of financial services.”

“We are truly happy to welcome the talented team of HDFC Ltd. into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence,” he said.

“As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry,” he added. 

Post the merger, HDFC Bank has no identified promoter. It also marks the transformation of HDFC Bank into a financial services conglomerate that offers a full suite of financial services, from banking to insurance, and mutual funds through its subsidiaries. So far, the Bank was a distributor for these products.

“The merger of India’s largest Housing Finance Company, HDFC Ltd. with the largest private sector bank in India combines the strengths of a trusted home loan brand with an institution that enjoys a lower cost of funds,” the bank said in a statement.  

“The larger networth would allow greater flow of credit into the economy. It will also enable underwriting of larger ticket loans, including infrastructure loans and contribute further to nation building and employment generation,” it added.

All employees of HDFC Ltd below the age of 60 as on effective date become HDFC Bank employees. Over the past months, the Bank has been preparing for smooth integration.

Post merger, the key HDFC Bank subsidiaries include HDFC Securities Ltd., HDB Financial Services Ltd., HDFC Asset Management Co. Ltd, HDFC ERGO General Insurance Co. Ltd., HDFC Capital Advisors Ltd. and HDFC Life Insurance Co. Ltd.