HDFC Bank and HDFC Ltd on Monday announced the combination of both entities, setting the stage for one of the largest offers in the Indian financial sector. The announcement of the merger caused a sharp increase in the share price of the two entities that rose more than 7 percent at the beginning of trading hours HDFC Bank said that transactions are expected to be closed for the next 18 months, depending on the settlement of regulatory approval and other custom closure conditions.
What is the plan of merger?
In accordance with the transaction structure, HDFC Limited, the largest housing finance company in India with assets under management (AUM) worth Rs 5.26 trillion and close the RS 4.44 trillion market will join HDFC Bank, the largest private sector bank in India with assets with The market hat is 8.35 trillion. Subsidiaries or HDFC Limited Associations will also be transferred to HDFC Bank
What is the share swap ratio of the transaction?
HDFC Limited shareholders, such as the date of the recording, will receive 42 shares of HDFC Bank for 25 shares of HDFC Limited.
How will the ownership change?
Post a merger, ownership of HDFC Limited shares on HDFC Bank will be extinguished and the HDFC Bank will be owned by 100 percent by public shareholders. The existing HDFC limited shareholder will have 41% of HDFC Bank.
How will the merger benefit the two entities?
Although this will increase the ability to sell products to a larger customer base, this step will help them take advantage of their distribution across urban geography, semi-urban and rural areas. The combined balance sheet of RS 17.87 trillion and the Net Wealth of RS 3.3 trillion will allow greater emission guarantees on a scale. N and Net Wealth Rs 3.3 trillion will allow larger underwriting on a scale.