IDFC-IDFC First Bank Merger To Come Into Effect From Oct. 1

The merger of IDFC Ltd. into its banking subsidiary, IDFC First Bank Ltd., will take effect from Oct. 1, the private lender announced in an exchange filing on Friday. The board of directors of IDFC First Bank approved the amalgamation date during a meeting held earlier on Friday.

IDFC Financial Holding Co. will be merged into IDFC on Sept. 30, a day before the merger, the filing added. The announcement followed the National Company Law Tribunal's approval for the merger of IDFC Financial Holding Co. into IDFC, and the subsequent amalgamation of IDFC into IDFC First Bank, which was granted two days prior.

The boards of all three entities had first approved the merger scheme in July 2023. This was followed by the Reserve Bank of India's approval of the scheme in December 2023. In May this year, most shareholders of IDFC First Bank gave their consent to the merger. The final approval was secured with the NCLT’s clearance on Wednesday.

As part of the reverse merger plan, IDFC shareholders will receive 155 shares of IDFC First Bank for every 100 shares they hold in IDFC. Both IDFC and IDFC First Bank shares have a face value of Rs 10 each.

The merger is expected to simplify the corporate and shareholding structure. It will also result in the flow of "Rs 600 crore of cash and cash equivalents" into IDFC First Bank, making the lender "eligible to pay dividends," the filing stated.

IDFC Bank received its banking licence from the RBI in 2014. In 2018, IDFC Bank completed its merger with Capital First to form IDFC First Bank.

Shares of IDFC First Bank closed 0.22% higher at Rs 74.19 apiece on the NSE, compared to a 0.14% decline in the benchmark Nifty 50. Year-to-date, the stock is down 16.5%.