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HDFC Bank and Housing Development Finance Corporation merger becomes effective from 1 July

HDFC Bank and Housing Development Finance Corporation merger becomes effective from 1 July

HDFC Bank and Housing Development Finance Corporation merger becomes effective from 1 July: HDFC Bank has announced the merger of Housing Development Finance Corporation Ltd. (HDFC) with itself. From July 7, all commercial papers of HDFC Ltd will be transferred in the name of HDFC Bank. Housing Development Finance Corporation shareholders will get 42 new HDFC Bank shares for every 25 shares held by them.

The merger of both entities will make it the fourth-largest lender in the world by market capitalization. The market cap of the combined entity is estimated to be $172 billion. The merger of both entities was announced on 4 April 2022. Now, HDFC Bank will be completely owned by public shareholders and existing shareholders of HDFC Ltd will own a 41% stake in the bank.

The merger would allow more credit to flow to the economy. It will also allow for the underwriting of larger-ticket loans. All employees of HDFC Ltd below the age of 60 would become HDFC Bank employees. Currently, HDFC Securities Ltd., HDB Financial Services Ltd., HDFC Asset Management Co. Ltd, HDFC ERGO General Insurance Co. Ltd., and HDFC Capital Advisors Ltd are the subsidiaries of HDFC Bank.

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