In a significant development, the merger between Housing Development Finance Corporation (HDFC)Ltd and HDFC Bank Ltd has successfully obtained final board approval . With a valuation of around USD 40 billion, this unprecedented merger creates a financial services powerhouse.
Milestone Merger
i.Composite Scheme of Amalgamation for merger:
- HDFC Investments Limited and HDFC Holdings Limited merged with HDFC Limited.
- HDFC Limited merged with HDFC Bank Limited has became effective from July 1, 2023.
Background:
Competition Commission of India (CCI), the National Company Law Tribunal (NCLT) approved the merger on March 17, 2023.The merger was initially approved by HDFC Bank’s board on April 4, 2022, in accordance with Sections 230 to 232 of the Companies Act, 2013, and the associated regulations.
Key Points:
i. With a combined valuation of USD 172 billion, the merger will impact millions of customers, shareholders, and various businesses associated with both HDFC and HDFC Bank, including group insurance and asset management ventures.
ii. With an impressive asset base of approximately Rs 18 lakh crore, the merged entity aims to establish a comprehensive ecosystem of financial services.
iii.The subsidies of HDFC Limited, including HDFC Life Insurance Company Limited, HDFC Asset Management Company Limited and HDFC Ergo General Insurance Company Limited, have become subsidiaries of HDFC Bank with effect from July 01, 2023.
iv.Now,HDFC Bank subsidiaries include HDFC Securities Ltd., HDB Financial Services Ltd., HDFC Asset Management Co. Ltd, HDFC ERGO General Insurance Co. Ltd., HDFC Capital Advisors Ltd. and HDFC Life Insurance Co. Ltd.
v.As a result of the merger, HDFC Bank has now become the promoter of the two insurance companies. Furthermore, effective from July 1, 2023, HDFC Bank has taken over as the co-sponsor of HDFC Mutual Fund, a mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996, replacing HDFC Limited.
Additional Info:
HDFC Bank has scheduled July 13, 2023 as the date for determining share allotments for HDFC shareholders. Additionally, HDFC’s non-convertible debentures will be transferred to the bank on July 12, 2023, with commercial papers to be transferred on July 7, 2023.
HDFC Bank to become India’s 2nd biggest company
After merging with mortgage lender HDFC, HDFC Bank is set to become the world’s fourth most valuable bank based on market capitalization and emerge as the second biggest company in India.
- The merger’s completion will witness HDFC Bank securing its position as the second most valuable company in India, just behind the formidable Reliance Industries, which held a market capitalization of USD 210 billion.
- The merged entity holds a market capitalization of USD 172 billion, outshining banking giants Industrial and Commercial Bank of China Ltd and Bank of America, and trailing only the formidable JPMorgan Chase.
Chairman of HDFC Deepak Parekh Announces Retirement Ahead of Bank’s Merger
Deepak Parekh, the esteemed chairman of Housing Development Finance Corporation (HDFC), has announced his retirement as HDFC prepares to merge with HDFC Bank, marking the end of his remarkable 45-year tenure. Parekh played a pivotal role in transforming HDFC into India’s largest financial services conglomerate, covering sectors like banking, asset management, insurance, and real estate.
i. Parekh served on the boards of prestigious corporations globally, including DP World, Fairfax Financial Holdings, and Economic Zones World.
ii. He was actively involved in influential economic groups and advisory committees, focusing on areas such as infrastructure, housing, and capital markets.
Awards received:
Deepak Parekh received following awards such as
| Country | Award | Year |
|---|---|---|
| India | Padma Bhushan | 2006 |
| France | Knight in the Order of the Legion of Honour | 2010 |
| Germany | Bundesverdienstkreuz Cross of the Order of Merit | 2014 |
He also received first international recipient of the Outstanding Achievement Award by Institute of Chartered Accountants in England and Wales, in 2010
About Housing Development Finance Corporation (HDFC) Bank:
Chairman – Mr. Atanu Chakraborty
MD & CEO – Sashidhar Jagdishan
Established in – 1994
Tagline – We Understand Your World
Headquarters – Mumbai,Maharashtra
