The Pension Fund Regulatory and Development Authority along with the National Stock Exchange and Bombay Stock Exchange have approved the merger of IDFC Ltd. and IDFC Financial Holding Co. with IDFC First Bank Ltd.
The company received a ‘no objection' and an observation letter from both BSE and NSE, according to its exchange filing on Monday.
The merger remains subject to various statutory and regulatory approvals, including from the RBI, the NCLT and the respective shareholders of the companies involved in the scheme, said the filings.
In an interview with BQ Prime, IDFC First Bank Chief Executive Officer V Vaidyanathan said the merger would help in simplifying corporate structure and also improve the book value per share for the bank.
"IDFC, give or take, has about Rs 600 crore worth of cash on their own balance sheet, which they got through the sale of (AMC business) stake to Bandhan Bank," Vaidyanathan said. "To that extent, our net worth goes up."
At the time of the merger, IDFC First Bank will issue 155 shares against every 100 shares of IDFC. After the merger, IDFC First Bank's book value per share goes up by 4.9%.
Shares of IDFC First Bank closed 0.07% higher at Rs 86.29 apiece on the BSE, as compared with a 0.50% decline in the benchmark Sensex.
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