The country's largest housing finance company HDFC Ltd on Monday, January 16, said it got approval from the Financial Services Commission, Mauritius, for the transfer of shares of Griha Investments from HDFC Holdings Ltd to HDFC Bank for the merger.

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Griha Investments is a wholly-owned subsidiary of HDFC Holdings Ltd and a foreign step-down subsidiary of Housing Development Finance Corporation (HDFC) Ltd.

Termed the biggest transaction in India's corporate history, HDFC Bank on April 4, 2022, agreed to take over the biggest domestic mortgage lender in a deal valued at about $40 billion, creating a financial services titan.

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The deal has got in-principle approval from the stock exchanges, Reserve Bank of India (RBI), SEBI, Pension Fund Regulatory and Development Authority (PFRDA), and Competition Commission of India (CCI).

The proposed entity will have a combined asset base of around Rs 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

Once the deal is effective, HDFC Bank will be 100 percent owned by public shareholders, and existing shareholders of HDFC will own 41 percent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.

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Following the merger, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore, as of the December 2021 balance sheet. Post-merger, HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.

Shares of HDFC ended at Rs 1,585.25, down by Rs 15.60, or 0.97 percent on the BSE.

(Edited by : Shoma Bhattacharjee)

First Published:Jan 16, 2023 7:29 PM IST