With HDFC-HDFC Bank merger complete, it is the end of an era for Deepak Parekh. From joining as Deputy General Manager at HDFC Ltd, Parekh rose through the ranks to retire as HDFC Chairman on June 30, 2023. Ahead of the HDFC Bank-HDFC merger completion, Deepak Parekh had written an emotional letter to shareholders saying "time to hang my boots"
Deepak Parekh joined his uncle’s firm HDFC Ltd in 1978. According to an offer letter July 19, 1978, Parekh was offered a basic salary of Rs 3,500 plus Rs 500 as a fixed Dearness Allowance. He was also entitled to a 15% Housing Rent Allowance and a City Compensatory Allowance at 10%
According to the 1978 offer letter, the 78-year-old banking industry doyen Deepak Parekh at the time was also entitled to Corporation’s Provident Fund, gratuity, medical benefits, and leave travel facilities as per rules. HDFC was also willing to reimburse the expense of his residential telephone
Over the past 45 years with HDFC, Deepak Parekh has been responsible for taking 5 companies public and has stitched together at least 7 M&A deals. Under him, HDFC has provided more than 9 million Indians with home loans and grew its loan book to Rs 7.24 lakh crore. The mortgage lender now commands more than a third of the overall home loan market
Deepak Parekh has been institutional for HDFC Group as he stitched together the biggest corporate merger in India’s history, creating a financial behemoth by bringing HDFC under the fold of HDFC Bank. By doing this, he has left behind a legacy that will probably be impossible to match in India’s financial services sector. After the merger, Parekh will not be serving on the HDFC Bank’s board, owing to RBI’s rules on age limits
While Deepak Parekh will be exiting, the board of HDFC Bank has approved the appointment of Keki Mistry and Renu Karnad as the additional non-executive directors of the bank. Keki Mistry was the Chief Executive Officer (CEO) and Vice Chairman of HDFC, while Renu Karnad was the Managing Director of HDFC since 2010
V Srinivasa Rangan, who was the Executive Director and Chief Financial Officer of HDFC, will now be serving as HDFC Bank Executive Director for three years from the date of the Reserve Bank of India’s approval. Subsequently, the shareholders’ approval will be taken
The merger of HDFC with HDFC Bank created a banking behemoth with a market cap of $180 billion, the fourth largest bank in the world. According to the share swap scheme, shareholders of HDFC will receive 42 shares of HDFC Bank (each of face value of Re 1), for 25 shares held in HDFC Ltd (each of face value of Rs 2), and the equity share(s) owned by HDFC Ltd in HDFC Bank will be extinguished as per the Scheme
Talking about the new structure in the merged entity, Deepak Parekh had said all employees below the age of 60 have been transferred to HDFC Bank branches. He added that there will be no pay cuts, and neither any employee has been offered a golden handshake due to restructuring. HDFC Bank will continue giving out loans
HDFC Bank is the biggest private bank in India. The mega banking merger between HDFC and HDFC Bank, which took place on July 1, is finally completed and July 13 is set as the record date for the merger. Hence, July 14 onwards HDFC shares shall stop trading as the company will get delisted