HDFC Bank shares jump 10% after merger announcement with HDFC
Shares of Housing Development Finance Corporation (HDFC) Bank jumped by 10% each in early trade after the mortgage lender HDFC announced a merger with the bank on Monday.
HDFC Bank share climbed by 9.99% to Rs 1,656.90 against the previous close of Rs 1,506.30 on BSE. Similarly, shares of mortgage lender HDFC gained 10% to Rs 2,696 against the previous close of Rs 2,450.95 today.
The board has approved the merger of its wholly-owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited, Mortgage lender HDFC announced today.
As part of the merger between HDFC and HDFC Bank, 42 shares of HDFC Bank would be given for every 25 shares of HDFC.
HDFC will acquire 41% stake in HDFC Bank through the transformational merger after that the HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC.
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Speaking on the big developments, Keki Mistry, the Vice Chairman and CEO of HDFC said that this merger will make HDFC Bank a large lender even by global standards. The merger will make more room for FII holding in HDFC Bank
The HDFC’s merger with its Bank will be completed by the second or third quarter of the Fiscal Year 2024. The Proposed Transaction shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base, the HDFC said.
HDFC Bank, a private sector bank, has a large base of over 6.8 crore customers said that the bank platform will provide a well-diversified low-cost funding base for growing the long tenor loan book acquired by HDFC Bank pursuant to the proposed transaction. A combination of HDFC Limited and HDFC Bank is entirely complementary to, and enhances the value proposition of, HDFC Bank, the bank further said.
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