Housing Development Finance Corporation Ltd (HDFC) clarified on Tuesday that the merger dates with HDFC Bank Ltd are tentative. The Chairman of HDFC, Deepak Parekh, had announced the dates earlier at a press conference in Mumbai.
HDFC stated that the effective date of the merger is subject to certain formalities being completed. The company mentioned that both HDFC and HDFC Bank are working towards finalizing the necessary requirements for the merger.
HDFC emphasized that the dates are tentative and are not within their control. They stated that once the boards of directors of both HDFC and HDFC Bank determine the effective date and record date, the information will be shared with the stock exchanges.
The merger between HDFC and HDFC Bank, which is an all-stock deal valued at USD 40 billion, is considered the largest transaction in the history of India Inc. The merger will create a financial services giant with combined assets of over Rs 18 lakh crore.
After the merger, HDFC shares will cease to be traded, and existing shareholders of HDFC will own 41% of HDFC Bank. The merger is expected to provide significant growth opportunities for mortgage loans.
The merger is advantageous as there are no common products between HDFC and HDFC Bank, preserving the benefits of the merger. The integration of employees under the age of 60 will take place immediately, while others will be retrained for different banking roles.
HDFC also clarified that the sale of its stake in HDFC Credila, an education loan arm, was done to comply with regulatory conditions for the merger. The sale proceeds and properties owned by HDFC, including Ramon House and HDFC House, will be transferred to HDFC Bank.
The merger approval allows HDFC two years to exit the schools it runs in Pune, Bangalore, and Gurugram, after which they will be under the control of HDFC Bank.
Overall, the merger dates are subject to completion of necessary formalities, and once finalized, the merger will significantly impact the financial landscape in India.