The Securities and Exchange Board of India (SEBI) has granted approval for a change in control of HDFC Asset Management Company (HDFC AMC) due to the amalgamation of HDFC Ltd and HDFC Bank Ltd. This move paves the way for HDFC Bank to become the new owner of HDFC AMC, subject to compliance with applicable regulations.
Amalgamation Completion Date Set for July
HDFC AMC announced in April that the merger between HDFC Ltd and HDFC Bank Ltd would be completed by July of this year. Upon completion, the combined entity is expected to have a total asset value of approximately Rs 18 trillion, solidifying its position as a major player in the Indian financial market.
Shareholding Structure After Merger
As part of the amalgamation, existing shareholders of HDFC Ltd will hold a 41% stake in HDFC Bank. Conversely, HDFC Bank will be entirely owned by public shareholders. Under the merger agreement, HDFC shareholders will receive 42 shares of HDFC Bank for every 25 shares they currently hold, ensuring a fair distribution of ownership.
SBI Funds Management’s Acquisition
In a separate development, SBI Funds Management Ltd has received approval from the Reserve Bank of India (RBI) to acquire a 9.99% stake in HDFC Bank Ltd by November 15. However, the RBI has set a condition that SBI Funds Management must ensure its aggregate holding in HDFC Bank remains below 10% of the bank’s paid-up share capital or voting rights at all times.
SEBI’s Final Approval for Change in Control
HDFC AMC sought SEBI’s approval for the change in control, as per the regulations under the Sebi (Portfolio Managers) Regulations, 2020 (PMS Regulations). In response, SEBI has granted its final approval, subject to compliance with the provisions outlined in the PMS Regulations and related circulars. This regulatory clearance paves the way for HDFC Bank to assume ownership of HDFC AMC.