Housing finance company HDFC Limited announces merger with HDFC Bank
Following the announcement, shares of the two entities witnessed a sharp rise of between 8-9% each on key equity indices.
India’s largest housing finance company HDFC Limited on Monday announced its merger with the country’s largest private lender HDFC Bank, PTI reported.
As per the proposed deal, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of the bank. Each shareholder will get 42 shares of HDFC Bank for every 25 shares of HDFC, according to The Economic Times.
The merger, however, is subject to approval from the Reserve Bank of India and other regulatory bodies.
In a press conference, HDFC chairperson Deepak Parekh termed the deal a merger of equals.
“We won’t be thrown out,” Parekh said, according to CNBC-TV18. “After 45 years in housing finance, we have to find a home for ourselves which we found in our own family company HDFC Bank.”
HDFC Bank Chief Executive Officer Sashidhar Jagdishan said the proposed transaction ticked all the right boxes in terms of completion of product offerings and product leadership in home loans, according to The Indian Express.
“It is value accretive for all the stakeholders of both the organisations, including shareholders, employees and customers,” Jagdishan said.
Following the announcement, shares of the two entities witnessed a sharp rise of between 8-9% each on key equity indices.
At 1.30 pm, shares of HDFC Bank gained Rs 133 or 8.88% to touch a high of Rs 1,640 on the Sensex pack. Meanwhile, shares of HDFC Limited saw an increase of Rs 226 or 9.25% and was trading at Rs 2,674.