HDFC to merge into HDFC Bank on July 1, create India’s financial behemoth (updated)

Housing Development Finance

30/06/2023 19:07

(Recasts paragraph 1, adds merger details, background
throughout)
    By Siddhi Nayak
       June 30 - The boards of Housing Development Finance Corp
 HDFC.NS  and HDFC Bank  HDBK.NS  on Friday approved July 1 as
the effective date of the two financial behemoths' $40 billion
merger, the largest in India's corporate history.
    Both the companies have set July 13 as the "record date" to
swap HDFC's shares with HDFC Bank's stock for its shareholders,
HDFC and HDFC Bank said in separate exchange filings on Friday.
    As per the deal announced in April last year, shareholders
of HDFC will receive 42 shares of HDFC Bank for every 25 shares
held, giving them ownership of 41% in the lender.
    With the share swap, HDFC Bank will become one of the
world's top 10 banks in terms of market capitalisation, as per
Refinitiv data.
    HDFC Bank's shares have gained about 13% so far since the
merger was announced, while the broader Nifty 50 index  .NSEI 
has risen over 8%.
    After the merger, HDFC Bank has no identified promoter. HDFC
Bank CEO Sashidhar Jagdishan will head the combined company,
while HDFC's Keki Mistry and Renu Sud Karnad will be on the
bank's board.
    With the merger, HDFC Bank's total loan book will be over 22
trillion rupees, behind only that of State Bank of India
 SBI.NS , the country’s largest lender.
        HDFC Bank will keep home loans at the centre of its
growth strategy after the merger, with such credit likely to
make up nearly a third of the lender's portfolio, two senior
officials at the group had told Reuters in June.
    

    The merger is also set to shake up the debt fundraising
market for non-bank financiers in India, as the exit of a large
borrower will leave investors searching for other options.
    Both the entities have set July 12 as a record date for
transfer of non-convertible debentures of HDFC in the name of
HDFC Bank.

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Home loans could make up a third of HDFC Bank's merged loan book
   https://tmsnrt.rs/3P3DhmR
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 (Reporting by Siddhi Nayak and Jose Joseph; Editing by Shilpi
Majumdar and Maju Samuel)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848;))