HDFC and HDFC Bank merger likely on 1 July

“We refer to some news reports of today referring to press interaction of the chairman of HDFC Ltd wherein inter alia the tentative effective date of the scheme as 1 July, and the tentative record date for determining the shareholders of HDFC Ltd, who would be allotted equity shares of HDFC Bank as per the share exchange ratio, as 13 July were given,” it said in a regulatory filing.

Earlier in the day, HDFC chairman Deepak Parekh told reporters that the merger would be effective on 1 July. News agency PTI quoted Parekh as saying that the boards of the mortgage lender and the bank will meet on 30 June to clear and approve the merger.

Mint reported on 6 June that HDFC Bank and its mortgage financier parent HDFC will merge on 1 July in one of the largest merger and acquisition deals of all time in India.

HDFC said in the statement on Tuesday that the two entities are working towards completing all the necessary formalities for the completion of the proposed merger as per the tentative dates. However, the dates are tentative and are subject to completion of certain formalities, including those beyond the control of either of the entities, it said.

“Once the board of directors of HDFC and HDFC Bank decide on the effective date of the scheme as well as the record date, the same would be intimated to stock exchanges in accordance with applicable regulations,” HDFC said.

In April last year, India’s largest private sector lender HDFC Bank and its promoter Housing Development Finance Corp. Ltd decided to merge in a deal expected to make the bank more competitive and allow access to a captive customer base to cross-sell products.

In a separate statement, HDFC said the Reserve Bank of India (RBI) relaxed the restriction regarding the onboarding of new customers by HDFC Credila Financial Services Ltd, provided the application for change in shareholding is submitted before 31 July. The other condition is that the shareholding of HDFC Bank in HDFC Credila has to be brought down to 10% on or before 31 March 2024.

On 19 June, HDFC said it would sell a 90% stake in education loan subsidiary HDFC Credila to BPEA EQT and ChrysCapital for ₹9,060.5 crore.

The mortgage lender said the proposed transaction would close within 15 business days from the completion of all conditions precedent, including receipt of regulatory approvals or a date mutually agreed between the parties. The deal would require approvals from RBI and the Competition Commission of India, it said, adding that the long stop date for this transaction is 31 March 2024.

Updated: 28 Jun 2023, 12:35 AM IST