Housing Development Finance Corporation (HDFC), which is the board of mortgage lender and private lending company HDFC Bank has agreed to do their merger on 1 July. July 13, 2023, will be the record date for both entities to merge and become one organization.
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A regulatory filing by HDFC mentioned that the board has approved “July 1, 2023, to be the ‘effective date’ of the (amalgamation) scheme, on which date the certified order of the NCLT sanctioning the scheme will be filed by HDFC Investments, HDFC Holdings, the Corporation, and HDFC Bank with the Registrar of Companies (RoC)”.
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The National Company Law Tribunal (NCLT) of Mumbai had approved the HDFC-HDFC Bank merger by giving it clearance in an order released on March 17. The exchange filing again added that in talks with the board of directors of HDFC Bank, July 13 was decided as the “record date” so that the shareholders of HDFC shall be given and allocated the shares of HDFC Bank.
July 13 has also been decided as the record date for the “continuation of warrants of the Corporation in the name of HDFC Bank”, the filing said.
The filing also mentioned that July 7 has been determined as the record date for the “transfer of commercial papers of the Corporation in the name of HDFC Bank”, and July 12 for the “transfer of non-convertible debentures”.
Talking about the final approval for the huge merger by the boards, HDFC Bank MD and CEO Sashidhar Jagdishan said that this is a defining event in their journey and the company is confident that the combined employee and stakeholders’ strength will help them to create a holistic ecosystem of financial services. They are delighted to welcome the talented team of HDFC Ltd into the HDFC Bank family.
Also, the twin companies earlier declared the decision to merge on April 4, 2022. The idea was to help HDFC acquire a 41 percent stake in HDFC Bank through the amalgamation plan.
In an interview with a media portal in March 2023, HDFC Vice Chairman and Chief Executive Officer Keki Mistry said that the union will help both companies to enjoy larger growth options in the future. Eventually, the idea is to increase housing loans from more branches of the bank. This growth option on housing loans will be huge in HDFC Bank i.e. the merged entity than the HDFC.
After the merger comes into effect, HDFC Bank will be enjoying 100% ownership through public shareholders, and the present shareholders of HDFC will own 41% of the bank.
In today’s times when banks and financial institutions are suffering from malpractices and fraudulent transactions, it seems great to see an Indian venture emerge as the world’s fourth-largest bank. One cannot deny the fact that the Parekh family had laid a strong foundation in the past to ensure that the bank doesn’t come in the wrong light in the media and public domain. Their dedication to serving the customers since its inception with various financial plans has helped them get a good name in the industry and also this merger has been seen as the next stepping stone for the generations to come to show their trust in the bank and related services.
(Image/The Economic Times)
