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National Company Law Tribunal (NCLT) approves HDFC and HDFC Bank merger

On March 17th, the National Company Law Tribunal (NCLT) approved the merger of HDFC Ltd and HDFC Bank, which is considered to be the largest merger in the history of corporate India. The merger will create a massive banking entity by combining India’s largest housing finance company with the country’s largest private lender. Prior to this, HDFC Ltd had already received approval from various regulatory bodies and stock exchanges for the merger. Shares of both companies were trading higher on the BSE during late trading hours.

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Important points of the news:

  • The merger of HDFC Bank and HDFC Ltd, valued at approximately $40 billion, has been approved by the competition commission and stock exchanges.
  • This merger, which is considered to be the largest transaction in India’s corporate history, will create a financial services giant with combined assets worth around Rs 18 lakh crore.
  • The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals. Following the merger, HDFC Bank will be fully owned by public shareholders, and HDFC’s existing shareholders will own 41% of the bank.
  • The combined balance sheet of the merged entity will be Rs 17.87 lakh crore, with a net worth of Rs 3.3 lakh crore as of the December 2021 balance sheet. After the merger, HDFC Bank will be twice the size of the current third-largest lender, ICICI Bank.

About the HDFC Ltd:

HDFC Ltd, or Housing Development Finance Corporation Limited, is one of the leading financial institutions in India. The company was established in 1977 with the objective of providing finance for the purchase or construction of homes. Here is a brief history of HDFC Ltd:

  • 1977: HDFC Ltd was incorporated as the first specialized mortgage company in India.
  • 1980: HDFC Ltd became the first private sector company to be approved by the Reserve Bank of India (RBI) to set up a housing finance company.
  • 1990: HDFC Ltd became the first Indian company to issue American Depository Receipts (ADRs) in the US.
  • 1996: HDFC Ltd was listed on the New York Stock Exchange (NYSE).
  • 1999: HDFC Ltd was listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
  • 2000: HDFC Ltd set up HDFC Bank as a subsidiary.
  • 2008: HDFC Ltd launched its real estate investment trust (REIT), HDFC Property Fund, which was one of the first private equity funds to invest in the Indian real estate market.
  • 2014: HDFC Ltd was ranked as India’s most valuable brand by BrandZ.
  • 2017: HDFC Ltd’s subsidiary, HDFC Standard Life Insurance, was listed on the BSE and NSE.

Today, HDFC Ltd is a diversified financial services company that provides a range of products and services including home loans, insurance, mutual funds, and banking services. The company has a strong presence in India and has also expanded internationally, with offices in Dubai, London, and Singapore.

Important takeaways for all competitive exams: 

  • HDFC Ltd Founder: Hasmukhbhai Parekh;
  • HDFC Ltd Founded: 1977;
  • HDFC Ltd Headquarters: Mumbai.

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