Lagatar24 Desk
New Delhi, April 4: HDFC stated on Monday that it will merge with HDFC Bank, with a share merger ratio of 42 HDFC Bank shares to 25 HDFC shares. HDFC Bank will be able to expand its housing loan portfolio and expand its existing customer base as a result of the proposed deal. Following the proposed merger, HDFC will control 41% of all transactions in the bank.
The combination must be approved by the RBI and other regulatory bodies. HDFC Bank has assets at Rs 19.38 lakh crore, while HDFC has total assets of Rs.6.23 lakh crore.
The proposed deal, according to an exchange filing, will help leverage and create substantial value for numerous stakeholders. Increased scale, a comprehensive product offering, balance sheet robustness, and the capacity to develop synergies across revenue prospects, operating efficiency, and underwriting efficiencies are also expected to benefit the company.
Notably, HDFC Bank has a client base of 6.8 crore people and a well-diversified low-cost funding base to help it develop its long-term loan book.
“A combination of the Corporation and HDFC Bank is entirely complementary to, and enhances the value proposition of HDFC Bank”, HDFC said in a regulatory filing.
“HDFC Bank would benefit from a larger balance sheet and networth which would allow underwriting of larger ticket loans and also enable a greater flow of credit into the Indian economy,” it added.
