HDFC-HDFC Bank merger: NCLT reserves order after hearing HDFC, HDFC Bank's counsels

The National Company Law Tribunal (NCLT) on Tuesday reserved the order for the merger of the Housing Development Finance Corporation (HDFC) and HDFC Bank, according to sources. The NCLT has heard HDFC and HDFC Bank's counsels and has sought time for the final judgment. The NCLT has not given any further date for the hearing.

On Monday, the proposed HDFC-HDFC Bank merger was approved by the shareholders. It also received the nod from the RBI (July 2022), the Pension Fund Regulatory and Development Authority (July 2022) and the Competition Commission of India (August 2022). The merger also received approval from stock exchanges in December 2022.

The merger was announced in April last year, with the merger ratio of 42 shares of HDFC Bank for 25 shares of HDFC. Post the merger, HDFC Bank will be 100 per cent owned by public shareholders, as the existing shareholders of HDFC would own 41 per cent share of HDFC Bank.

HDFC is a key provider of home loans to the low-income group (LIG) and middle-income group (MIG) segments under the affordable housing initiatives. Access to housing finance for this category would be improved further on account of low-cost funds available with HDFC Bank, the two entities said last year.

Post the merger, HDFC Bank’s customers could be offered mortgages as a core product. HDFC Bank will also leverage the long-tenor mortgage relationship to offer varied credit and deposit products enabled through better insights throughout the customer life-cycle. This will result in an enhanced value proposition and customer experience for all customers of the combined entity, the two entities said last year.

The HDFC-HDFC Bank merger is projected to be one of the largest mergers in India's corporate history. The merger, in terms of market capitalisation, is set to create the third largest company in the country, which would have a combined asset base of around Rs 18 lakh crore.