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IDFC gets CCI nod for merger with IDFC First Bank

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.

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