There will be a merger of HDFC and HDFC Bank. After the merger, HDFC will have 41 percent stake in HDFC Bank.
HDFC to Merge With HDFC Bank Detail: There will be a merger of HDFC and HDFC Bank. After the merger, HDFC will have 41 percent stake in HDFC Bank. In fact, the board of directors of HDFC has approved the merger with the private sector HDFC Bank. Shareholders and creditors of the company will also be involved in this merger. The company has given this information on Monday. Under this deal, HDFC Bank will be 100% owned by public shareholders. Whereas the existing shareholders of HDFC Limited will have 41 percent stake in HDFC Bank.
What will HDFC shareholders get
After the news of this deal, there has been a great rise in the shares of HDFC and HDFC Bank. If the share of HDFC Bank strengthened by more than 10 percent, then HDFC has also seen a rise of about 10 percent. HDFC shareholders will get 42 equity shares as per share exchange ratio in the combined company for every 25 equity shares.
HDFC says that the objective of this deal is to improve HDFC Bank’s housing loan portfolio and increase its existing customer base. This merger of HDFC and HDFC Bank will be completed by the second or third quarter of the fiscal year 2024.
Housing finance business will boom
HDFC Ltd Chairman Deepak Parekh says that this is an equal merger. He said that due to the implementation of RERA, infrastructure status to the housing sector, the government’s initiative on affordable housing, among other things, there will be a big boom in the housing finance business. In the last few years, many regulations of banks and NBFCs have been made better. This has created the possibility of merger. This gave a large balance sheet an opportunity to underwrite large infrastructure loans. At the same time, the credit growth of the economy increased. At the same time, affordable housing got a boost and all priority sectors including agriculture were given more credit than before.
HDFC Bank Chairman Atanu Chakraborty says that the combined company will benefit from HDFC Limited’s product and market leadership in the housing finance business and HDFC Bank’s distribution and customer leadership. He called it a positive step. He says that the aim of the government is to give houses to all. This is an effective step in this direction.
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