Giant private lender HDFC Bank is merging with its top shareholder in a $40bn deal that makes it India's biggest ever.
HDFC Bank's deal with mortgage lender firm HDFC Ltd, which owns 21% of the firm, will aim to grow its 68 million customers and expand the range and type of home loans offered to customers.
Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held, the two companies said in a statement on 4 April.
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 the 2024 financial year, subject to regulatory approvals.
When the deal completes, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC will own 41% of the bank,
Making the announcement, HDFC Chairman Deepak Parekh said it is a "merger of equals", which will also benefit the economy as a larger balance sheet and capital base will allow a greater flow of credit into various sectors.
The transaction involves the amalgamation of HDFC and its two wholly-owned subsidiaries HDFC Holdings and HDFC Investments with HDFC Bank.
