HDFC merges with HDFC Bank to create India’s largest financial conglomerate

HDFC Bank, one of India’s leading private sector banks, confirmed the successful completion of its merger with HDFC Ltd., a premier housing finance company.

The merger, which was first announced on April 4, 2022, was projected to take 15 to 18 months and is effective as of July 1, 2023.

The merger has come into effect following the receipt of all necessary shareholder and regulatory approvals. The integration of the two entities brings together the significant complementary benefits of both businesses.

The merged company is expected to generate meaningful value for a variety of stakeholders, including customers, employees, and shareholders of both entities, through increased scale, comprehensive product offerings, balance sheet resiliency, and the ability to drive synergies across revenue opportunities, operating efficiencies, and underwriting efficiencies.

As per the merger scheme’s share exchange ratio, HDFC Bank will issue and allot 42 new equity shares of face value Rs 1, fully paid-up, for every 25 equity shares of face value Rs 2 each fully paid-up held by such shareholder in HDFC Ltd. The record date is set for July 13, 2023.

Following the merger, HDFC Bank will no longer have an identified promoter. This transition marks the evolution of HDFC Bank into a financial services conglomerate offering a full suite of services, from banking to insurance and mutual funds through its subsidiaries.

The amalgamation of India’s largest housing finance company, HDFC Ltd., with the largest private sector bank in India merges the strengths of a trusted home loan brand with an institution with a lower cost of funds. The greater net worth will facilitate a more extensive flow of credit into the economy, enabling the underwriting of larger ticket loans, including infrastructure loans, thereby further contributing to national development and job creation.

Sashi Jagdishan — HDFC Bank CEO and MD said: “This is a defining event in our journey and I’m confident that our combined strength will enable us to create a holistic ecosystem of financial services. We’re truly happy to welcome the talented team of HDFC Ltd. into the HDFC Bank family.

“I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence. As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry.”

All HDFC Ltd. employees as of the effective date will become HDFC Bank employees. Over the past months, HDFC Bank has been preparing for smooth integration across all aspects to ensure a seamless transition for employees from HDFC Ltd.

HDFC Bank’s key subsidiaries post-merger include HDFC Securities Ltd., HDB Financial Services Ltd., HDFC Asset Management Co. Ltd, HDFC ERGO General Insurance Co. Ltd., HDFC Capital Advisors Ltd. and HDFC Life Insurance Co. Ltd.

  Banking industry news, HDFC, HDFC Bank, India, Sashi Jagdishan