HDFC Limited said that its board of directors approved a composite scheme of amalgamation for the merger of into and with HDFC Limited into HDFC Bank and their respective shareholders and creditors at a meeting held today.
To merge HDFC Limited with and into HDFC Bank, the share exchange ratio will be 42 HDFC Bank equity shares (credited as fully paid up) of the face value of Re 1 for every 25 fully paid-up HDFC Limited equity shares the face value of ₹2.
When the Scheme goes into effect, public shareholders will own 100% of HDFC Bank, while existing HDFC Limited shareholders will own 41% of HDFC Bank.
“The proposed transaction, shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base. It will also create meaningful value for various stakeholders as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, amongst others,” HDFC added in the exchange filing.
The board has also approved the merger of HDFC Investments Limited and HDFC Holdings Limited.