HDFC-HDFC Bank Merger Effective From July 1, says chairman Deepak Parekh; HDFC Shares Delisting on July 13

Deepak Parekh, the chairman of the Housing Development Finance Corporation (HDFC), announced on Tuesday that the merger of HDFC Bank and HDFC will take effect on July 1. The delisting of the company’s stocks will commence on July 13, according to Keki Mistry, vice-chairman and CEO of HDFC.

According to Parekh, the last HDFC board meeting will be conducted on June 30, after market hours. The boards of HDFC and HDFC Bank will be coming together to clear and approve the merger. He also mentioned that all regulatory approvals are already in place.

In a deal worth about $40 billion, in April 2022, HDFC Bank announced that it would acquire Housing Development Finance Corporation (HDFC), the largest mortgage lender in the nation. The merger, which has been dubbed the “biggest deal in the corporate history of India,” will create a financial services titan with a combined asset base of roughly 18 lakh crore.

Later, HDFC stated in a regulatory filing that the merger dates were uncertain and subject to the fulfilment of certain formalities, some of which were out of the control of HDFC Limited or HDFC Bank. It said, “Once the board of directors of HDFC Limited and HDFC Bank decide on the effective date of the scheme as well as the record date, the same would be intimated to stock exchanges in accordance with applicable regulations.”

The conclusion of the mega-merger has been eagerly anticipated by traders and investors alike. Due to cost savings and synergies, investors are bullish on the combined company, but traders see arbitrage opportunities.

What Happens After The Agreement Is In Place?

Once the agreement is in place, existing HDFC shareholders will own 41% of the bank, making public shareholders the sole owners of HDFC Bank. According to the merger agreement, each HDFC shareholder will receive 42 HDFC Bank shares for every 25 HDFC shares they currently own. After the merger, HDFC Bank will become the 10^th largest bank in the world.

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