Mega-merger gives Indian lender new lease on life

Housing Development Finance

20/06/2023 04:24

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
    By Shritama Bose
       MUMBAI, June 20 (Reuters Breakingviews) - HDFC Bank
will, after combining with its parent and largest shareholder
next month, become a $140 bln mortgage giant in a credit-starved
market. That’s an enticing prospect for foreign investors -
assuming the bank’s tech and culture get a needed overhaul.

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    CONTEXT NEWS
    Housing Development Finance Corporation said on June 19 it
had agreed to sell a 90% stake in its education-loan unit
Credila for 90.6 billion rupees ($1.1 billion) to a consortium
of BPEA EQT and ChrysCapital. The Reserve Bank of India had
asked the mortgage financier to reduce its stake in Credila to
10% within two years of the effective date of the former’s
merger with HDFC Bank.
    The merger of Housing Development Finance Corporation and
HDFC Bank is likely to be completed by July, the bank’s Chief
Financial Officer Srinivasan Vaidyanathan said in an earnings
call on April 15. The deal was announced in April 2022. Housing
Development Finance Corporation created HDFC Bank in 1994 and
remains a 26% shareholder. 

 (Editing by Antony Currie and Thomas Shum)
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