The National Company Law Tribunal (NCLT) on Friday gave its approval to the HDFC-HDFC Bank merger.
The merger between the two entities has received in-principle approval from regulators including the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (Irdai) and the Pension Fund Regulatory and Development Authority (PFRDA). The shareholders approved the transaction as well.
The merger has been cleared by the stock exchanges and the competition commission.
Termed as the biggest transaction in India’s corporate history, HDFC Bank on April 4 agreed to take over the biggest domestic mortgage lender in a deal valued at about USD 40 billion, creating a financial services titan.
The proposed entity will have a combined asset base of around Rs 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.
Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank.
Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.
Following the merger, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore, as of the December 2021 balance sheet.
Post-merger HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.