Housing Development Finance Corp.'s merger with HDFC Bank Ltd. will be effective July 1, according to Deepak Parekh, completing what is touted as the biggest such deal in India's corporate history.
The boards of HDFC and the private bank will meet on June 30 to clear and approve the merger, Parekh, chairman at the mortgage lender, told reporters on Tuesday.
Keki Mistry, vice-chairman and chief executive officer at the housing finance company, said HDFC stock will delist effective July 13. The merged HDFC Bank stock will start trading by July 17.
"The idea is to minimise the period of time when HDFC Limited shares don't trade on the market," Mistry said.
HDFC Bank on April 4, 2022 agreed to take over the biggest domestic mortgage lender. The proposed entity will have a combined asset base of around Rs 18 lakh crore.
"All asset and liabilities get grandfathered, so all depositors will get their rate of interest which we have committed until the tenor of the deposit," Parekh told reporters.
Once effective, HDFC Bank will be fully owned by public shareholders, with existing shareholders of HDFC holding 41%. Every shareholder will get 42 shares of HDFC Bank for every 25 held in HDFC.
HDFC's and HDFC Bank's shares were trading 1.48% and 1.31% higher, respectively, as of 3:15 p.m. on Tuesday, following the announcement. The benchmark Nifty Bank was also up 1.22%.
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