Share price of HDFC Bank on BSE has increased by almost 13% to Rs 1712.45. The share price of Housing Development Finance Corporation Ltd, or HDFC Ltd, on the BSE has increased by nearly 15% to Rs 2818.55.
HDFC Bank’s share price leaped 10%, while Housing Development Finance Corporation Ltd or HDFC Ltd share price raised 13% in early morning trade on Monday.
It resulted after both companies said India’s largest private lender, HDFC Bank, would converge with the country’s largest housing finance company, HDFC Ltd in order to create a financial services conglomerate, as per a report on Reuters.
According to the bank, the share exchange ratio for the merger of HDFC with and into HDFC Bank will be 42 fully paid-up equity shares of HDFC Bank with a face value of Re 1 for every 25 fully paid-up equity shares of HDFC with a value of Rs 2.
The board of directors of HDFC Bank has also given its approval for the execution of an implementation agreement between HDFC Limited and HDFC Bank, which mutually sets out
the manner of implementing the proposed transaction contemplated under the scheme, the representations and warranties being given by each party, and the respective parties’ rights and responsibilities in relation to the proposed transaction, the bank said in a BSE filing.
The share exchange ratio has been calculated using a joint valuation report from independent valuers, as well as a fairness opinion from a SEBI licensed merchant banker, according to the statement.
The planned merger, according to HDFC Bank, will allow the bank to expand its housing loan portfolio and expand its existing client base. The proposed transaction, according to the private lender, is predicated on exploiting the Parties’ considerable complementarities.
The merged organization would benefit from increased scale, a comprehensive product offering, balance sheet robustness, and the capacity to develop synergies across revenue prospects, operating efficiency, and underwriting efficiencies, among other things, it stated.
Published By : Ankit Singh
Edited By : Khushi Thakur
