PFRDA Approves HDFC, HDFC Bank Merger Proposal

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PFRDA Approves HDFC, HDFC Bank Merger Proposal
16 Jul 2022
6 min read

News Synopsis

HDFC Bank announced on Friday that it has received approval from pension fund regulator PFRDA for its parent company HDFC Ltd's merger proposal with itself. In what is being billed as the largest transaction in Indian corporate history, HDFC Bank agreed on April 4 to acquire the largest domestic mortgage lender in a deal worth approximately USD 40 billion, creating a financial services titan.

The Pension Fund Regulatory and Development Authority (PFRDA) "has granted approval for change in status/constitution pursuant to the scheme in accordance with the PFRDA (Point of Presence) Regulations, 2018, subject to the conditions mentioned therein," HDFC Bank said in a regulatory filing.

According to the company, the merger proposal is still subject to various statutory and regulatory approvals, including those from the Competition Commission of India (CCI), the National Company Law Tribunal (NCLT), other applicable authorities, and the respective shareholders and creditors. The proposed merger has already been approved by both the BSE and NSE, as well as the Reserve Bank of India (RBI).

The proposed entity will have a total asset base of approximately Rs 18 lakh crore. Subject to regulatory approvals, the merger is expected to be completed in the second or third quarter of FY24. Once the transaction is completed, HDFC Bank will be 100% owned by public shareholders, with existing HDFC shareholders owning 41% of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.

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