HDFC Bank jumps 3% on merger completion; HDFC Life too gains in trade
HDFC Bank-HDFC merger: Termed as the biggest transaction in the history of India Inc, HDFC Bank on April 4, 2022, agreed to take over its parent, which is the largest pure-play mortgage lender, in a $40-billion all-stock deal, creating a financial services titan with a combined asset of over Rs 18 lakh crore.
HDFC Bank-HDFC merger: Shares of HDFC and HDFC Bank were buzzing in trade on July 3 after the companies officially announced on July 1 that the merger between the two had been completed. At the time of writing this report, the shares of HDFC were trading 3.35 per cent higher at Rs 2,916 levels. HDFC Bank was also trading 3 per cent higher at Rs 1,753.50 on the BSE.
Following the reverse merger, HDFC will cease to exist from July 1 onward. "Saturday, July 1, 2023, to be the 'Effective Date' of the composite scheme of amalgamation, on which date the certified order of the NCLT sanctioning the Scheme will be filed by HDFC Investments, HDFC Holdings, HDFC Limited, and HDFC Bank with the RoC," HDFC Bank said in a regulatory filing. Shares of HDFC are expected to be delisted on July 13.
Termed as the biggest transaction in the history of India Inc, HDFC Bank on April 4, 2022, agreed to take over its parent, which is the largest pure-play mortgage lender, in a $40-billion all-stock deal, creating a financial services titan with a combined asset of over Rs 18 lakh crore.
The combined shares of the HDFC twins will have the highest weighting on the indices at close to 14 per cent, much higher than the present index heavyweight Reliance Industries with a 10.4 per cent weightage, according to a PTI report.
With the deal becoming 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 they hold.
Post-merger, HDFC Bank will become the fourth most valued lender in the world, and narrow the gap by asset size with state-owned SBI to be the second largest Indian bank. The total business of the merged entity stood at Rs 41 lakh crore at the end of March 2023. With the merger, the net worth of the entity would be over Rs 4.14 lakh crore.
The combined profit of both entities was to the tune of about Rs 60,000 crore at the end of March 2023.
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