The way is clear for merging the country's largest housing finance company HDFC and the largest private bank HDFC Bank. The HDFC and HDFC Bank boards approved this in separate meetings held on Monday. As soon as this news came to the fore, the stock of both of them gained tremendous momentum.
Both the companies informed the stock exchanges after the board meeting. A vital press conference will be held in this regard today at 11:30 pm. In the press conference, along with the official announcement of the merger, other details can be given. On the other hand, as soon as this news came out, the stocks of both the companies were seen rising. HDFC stock was up 13.60 percent on BSE at 10 am. Similarly, HDFC Bank's stock was also up about 10 percent.
Both the companies said that the merger is yet to get approvals from various regulators. For this merger, both the companies will have to get permission from RBI, SEBI, CCI, National Housing Bank, IRDAI, PFRDA, NCLT, BSE, NSE, etc. Both the companies will also have to get approval from their respective shareholders and creditors. As per the information given, all the subsidiaries and associates of HDFC will become part of HDFC Bank once all necessary approvals are received.
The company said, "As on the record date, HDFC Limited shareholders will get 42 shares of HDFC Bank with the face value of Rs 1 for 25 shares of the face value of Rs 2." After the merger, HDFC Bank will become a 100% public shareholding company. After the merger, HDFC Limited will have a 41 percent stake in HDFC Bank.
The two companies said that the combined entity would bring together both forces. After the merger, HDFC Bank customers will also be able to use the mortgage as a core product. The boards of both companies view that this deal will create long-term value for all stakeholders, including customers, employees, and shareholders. This merger will also strengthen the government's vision of 'Housing for All.'