Mumbai: HDFC twins, India’s largest housing finance company is all set to merge with the country’s leading private bank in an all-stock deal to create a behemoth business entity with a market value of around Rs 14 lakh crore. The merger may take around 18 months to be completed.
Who’s who of the market and rating agencies have applauded the mega-merger saying that it’s a win-win for both the companies and their investors and also for the Indian economy.
Read also: Merger to unlock value for HDFC Bank, positive for macro economy: Brokerage
What is there for customers?
What is clear is that the status quo will be maintained until the amalgamation takes effect by Q3 or Q4 of FY24. . Since the proposal will need to be approved by regulators like Reserve Bank of India (RBI), Competition Commission of India (CCI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Funds Regulatory and Development Authority (PFRDA). After the merger, the home loan portfolio of the HDFC, will move to HDFC Bank portfolio.
Market capitalisation of merged HDFC twins
The combined market capitalisation of the HDFC twins is around Rs 14,22,652.57 crore higher than of TCS’ Rs 13,73,882.31 crore
As part of the said merger of HDFC and HDFC Bank, investors will get 42 shares of HDFC Bank for every 25 shares of HDFC. Post-merger HDFC Bank will be 100% owned by shareholders while the existing shareholders of HDFC will own about 41% in HDFC Bank.
Till Dec 3, 2021, HDFC has total assets of about Rs 6.23 lakh crore, having a turnover of Rs 35 thousand crore and a net worth of around Rs 1.15 lakh crore.
On the other hand, till Dec 31, 2021, HDFC Bank, has total assets of about Rs 19,38,285.95 crore, and a net worth of around Rs 2.23 lakh crore.
Read also: Indices extend gains on HDFC merger deal; Sensex up over 1,400 pts
In a statement HDFC Bank said the proposed merger will help HDFC Bank to build its own home loan portfolio and increase the customer base. Deepak Parikh’s of HDFC told to the media that the proposed merger would create meaningful value for various stakeholders. Since the joint business entity would benefit from increased scale, comprehensive product portfolios and offering will drive synergies across the board in efficient manner.
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