HDFC, HDFC Bank shares rally up to 10% on announcement of transformational merger
HDFC Bank Chairman Deepak Parekh said that the biggest benefit of this merger will be the customers of HDFC Bank.
HDFC Bank has announced the long-awaited merger of HDFC twins – HDFC Bank and mortgage lender HDFC. The proposed merger will help the private lender build its home loan portfolio and expand its existing customer base. HDFC Bank Chairman Deepak Parekh said that the biggest benefit of this merger will be the customers of HDFC Bank.
HDFC-HDFC Bank merger will reduce single product exposure, enhance the asset diversity of the combined entity. Parekh said the combined entity would be in a position to seamlessly offer mortgage products versus the current assignment route.
Parekh said that the Reserve Bank of India (RBI) is working on SLR, CRR, PSL in a phased manner.
“Board Housing Development Finance Corporation (HDFC) Limited announced on Monday that its Board has approved a comprehensive plan of amalgamation for the purpose of merger of HDFC Bank with and with HDFC Bank, and their respective shareholders and creditors. This was a long-awaited gesture by the company and the shareholders. This merger will create long-term prosperity for the shareholders of the companies. The amalgamation ratio is 25/42. i.e. if you have 25 fully paid-up equity shares, if face value 2 each of HDFC Ltd. You will get 42 shares of HDFC Bank Ltd., then face value 1 each will be fully paid-up equity shares. Upon the Scheme becoming effective, HDFC Bank will issue equity shares to the shareholders of HDFC Limited as on the record date. The equity shares held by HDFC Ltd in HDFC Bank shall stand liquidated as per the plan. The boards of both the companies are of the view that the merger will create long-term wealth for all stakeholders including customers, employees and shareholders of both the entities.”
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