Mumbai, June 27 (PTI) The reverse merger between HDFC ,a significant player in the Home Finance industry ,and HDFC Bank ,a Banking affiliate ,is Anticipated to be finished by June 30 ,& the Merger would go into Effect on July 1 ,the Corporation Said late Tuesday night.
“Almost all of the Necessary approvals have been Obtained, and we anticipate completing the Merger Process by July 1.” According to Parekh ,Who was Joined by his deputy Keki Mistry, On June 30 After Business hours ,the boards of HDFC and the Bank will meet separately to clear and approve the merger ,Which will go into effect on July 1.
The Corporation later in the evening, however, made it clear through an exchange filing that the dates mentioned by the chairman Parekh are provisional as they are still expecting a few more clearances.
We Want to make it Clear that HDFC and HDFC Bank are Working hard to meet all of the Requirements so that the Proposed Amalgamation can be Finished by the Timeframes Specified above.
The business explained the exchanges, stating that the “above merger dates and record date for share swaps are tentative and subject to completion of certain formalities, including those which are beyond HDFC’s or HDFC Bank’s control.
Ajay Agarwal, the company secretary for HDFC
Ajay Agarwal, the company secretary for HDFC, claimed that since March 17, 2023 ,the merger scheme has been approved by a number of regulatory bodies ,Including Stock Exchanges ,the Reserve The National Company Law Tribunal’s Mumbai bench, the Securities and Exchange Board ,the Competition Commission ,and the Bank.
Considering these, he stated, “We clarify that today’s news reports referring to the press interaction of Deepak Parekh the chairman of HDFC ,the tentative effective date ,for the merger scheme as July 1, 2023, and the tentative record date for determining the shareholders of HDFC who would be Allotted equity shares of HDFC Bank in accordance with the share exchange Ratio as July 13, 2023, are tentative.”
The Effective date of the merger scheme and the Record date will be Determined by the boards of HDFC and HDFC Bank ,and those decisions will be Communicated to Stock Markets in Accordance with applicable legislation.
Notably, there was no mention of the Board meeting that Parekh and Mistry Claimed Was Set for June 30 in the clarification.
After dedicating the HT Parekh Legacy Centre at the Ramon House, the headquarters of the housing finance major, which manages over Rs 6 lakh crore in home loans in its book, Deepak Parekh’s uncle, who founded the nation’s first home finance company in 1978 after retiring from ICICI Ltd in 1977, was speaking with reporters.
Keki Mistry, vice chairman and CEO of HDFC
Keki Mistry, vice chairman and CEO of HDFC, stated that following the all-stock merger, trading in HDFC shares will end on July 13 or 14.
There is little doubt that HDFC shares will begin trading as HDFC Bank shares as early as July 13 or 14, and at the latest by July 17. Since the exchanges will decide and carry out this process, I am sorry but I am unable to provide you a certain timeline for this, said Mistry.
On April 4, 2022, HDFC Bank agreed to acquire its parent
On April 4, 2022, HDFC Bank agreed to acquire its parent, the largest pure-play mortgage lender, in a USD 40 billion all-stock deal, establishing a financial services titan with a combined asset of more than Rs 18 lakh crore. This agreement was dubbed the greatest transaction in the history of India Inc.
The combined shares of the HDFC twins will be weighted on the indexes at a rate of close to 14%, which is significantly higher than the current index heavyweight Reliance Industries, which is weighted at 10.4%.
Existing HDFC shareholders will control 41% of the bank after the agreement is in place, making public shareholders the only owners of HDFC Bank. For every 25 HDFC shares that a shareholder has, they will acquire 42 HDFC Bank shares.
Only 2% of the bank’s more than 70 million customers have taken out a home loan from the corporation, and another 5% have gotten one from another lender, according to Mistry, whose appointment to the bank’s board as an independent director is pending Reserve Bank approval. This demonstrates the enormous development potential.
Additionally, we receive 75,000 loan applications on average; imagine how high that number could rise with the combined power of the bank, Parekh continued.
The largest Benefit of the Merger ,According to Parekh and Mistry ,is that the bank and the Corporation have little in common with each other’s Businesses. Mortgages are not the bank’s business. It is the merger’s greatest benefit since, when there are similar products, the advantages of the merger are diminished.
They added that a shared culture between the two organisations is another benefit. Parekh ,Who Joined the bank at his uncle’s insistence after quitting his lucrative position with Chase Manhattan in Dubai ,said he expects the institution to uphold its founder’s principles going forward.
After 46 years with the Corporation ,Parekh Said that June 30 would be his Last day of Employment.
After 46 years with the Corporation ,Parekh Said that June 30 would be his Last day of Employment. When asked what he Would do following the board meeting ,he playfully replied ,”I will have a few drinks.”
Regarding the Integration of Individuals ,Mistry stated that all those under the age of 60 Will Move into the Bank Right away because the RBI forbids those above 60 from working in banks.
Only a tiny fraction of these 4,000 employees will be retiring or Deciding to Hang up their Boots after the merger ,According to Mistry. All of our 4,000 staff ,with the Exception of a few who are approaching 60 ,will transfer to the new bank as soon as the merger closes ,and they will continue to provide mortgage lending Services until they are retrained to do regular banking operations, according to Mistry.
Regarding the sale of Credila ,Parekh stated that we made the Decision to Sell them since it was one of the requirements the regulator proposed for the Approval of the merger and the benefit of the sale is that the Company may continue to Onboard students During this busy academic season.
He added that another choice was to halt new lending until the sale. He anticipates that the selling process will be finished within the next two to four weeks because by that time they anticipate receiving the CCI okay. According to him, all of the Rs 9,060 crore from the sale as well as all the properties owned by the Corporation—including the Ramon House, which is home to the HT Parekh Legacy Centre as well as the neighbouring HDFC House and the HUL House—will be deposited in the bank.
On June 20, HDFC said that it had sold a group of private equity firms, including BPEA EQT and ChrysCapital, 90% of its investment in the education lending division HDFC Credila. The deal happened after the RBI in April requested that HDFC cut its interest in Credila from 10% to under 10% over the following two years.
In the fiscal year 2023, HDFC Credila earned a total of Rs. 1,352.18 crore and had a net value of Rs. 2,435.09 crore.
Kopvoorn, Moss Investments, Defati Investments Holding, and Infinity Partners are further members of the PE consortium. Kopvoorn is a member of the ChrysCapital group, whereas Defati Investments Holding and Infinity Partners are a part of the BPEA EQT Group and Moss Investments.
Parekh stated that the RBI has given us two years to close the three schools that HDFC operates in Pune, Bangalore, and Gurgram.