HDFC Bank's proposed merger with BSE gets approval from both stock exchanges

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HDFC Bank's proposed merger with BSE gets approval from both stock exchanges

The proposal to merge with its banking subsidiary Bank, the biggest transaction in India's corporate history, has received approval from stock exchanges.

Both stock exchanges have received no objection from both of them.

In a filing, a letter with 'no adverse observations' from BSE Limited and a observation letter with 'no objection' from the National Stock Exchange of India Limited were received from a July 2, 2022 observation letter with 'no adverse observations' from the BSE Limited.

The scheme is subject to various statutory and regulatory approvals including approvals from the Reserve Bank of IndiaBank of India, Competition Commission of India, the National Company Law Tribunal and the respective shareholders and creditors of the companies involved in the scheme.

On April 4, India's largest private lender HDFC Bank agreed to take over the biggest domestic mortgage lender in a deal valued at around USD 40 billion, creating a financial services titan.

The proposed entity will have a combined asset base of around 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY 24, subject to regulatory approvals.

HDFC Bank will be 100 per cent owned by public shareholders once the deal is done, and existing shareholders of HDFC will own 41 per cent of the bank.

For every 25 shares held, HDFC shareholders will get 42 shares of HDFC Bank.

The BSE said in a letter to the BSE, the company is advised to disclose the details of all the actions taken by Sebi or any other regulator against any of the entities, its directors promoters and promoter group, in the petition to be filed before the NCLT.

The company will make sure that no changes to the draft scheme are made without the written consent of Sebi, except those mandated by the regulators or tribunals.

The proposed equity shares issued in terms of the scheme should only be issued in dematerialised form, it said.

The balance sheet will be 17.87 lakh crore and the net worth will be 3.3 lakh crore as of December 2021, according to the balance sheet.

The market value of HDFC Bank was 8.36 lakh crore USD 110 billion as of April 1, 2022, and HDFC Rs 4.46 lakh crore USD 59 billion post-merger HDFC Bank will be twice the size of ICICI Bank, which is the third-largest bank now.