The Competition Commission of India (CCI) has given its approval for the merger of the Infrastructure Development Finance Company (IDFC) and IDFC First Bank. This approval was communicated through a regulatory filing on October 17, 2023.
Previous Approvals
- The merger had previously received the green light from the board of directors of both IDFC and IDFC First Bank on July 3.
Next Steps for the Merger
- However, for the merger to be finalized, it still needs approval from various statutory and regulatory bodies.
- These include the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the National Company Law Tribunal (NCLT).
- The merger also needs the consent of stock exchanges, as well as the agreement of shareholders and creditors of both IDFC and IDFC First Bank.
Current Ownership
- As of June 30, 2023, IDFC held a 30.93 percent stake in IDFC First Bank through its non-financial holding company.
Completion Target and Share Exchange Ratio
- Both entities aim to complete the merger in the current fiscal year and have agreed on a share exchange ratio of “155:100.”
- This means that for every 100 shares of IDFC, shareholders will receive 155 shares of IDFC First Bank.
Comparison with HDFC Merger
- This merger comes in the context of Housing Development Finance Corporation (HDFC) completing its merger with HDFC Bank on July 1.
Stock Market Response
- On October 17, the shares of IDFC First Bank closed at ₹91.63, which was a 0.79 percent increase compared to the previous day’s closing price.