With $172 billion market valuation, the merged bank entity will be ranked fourth in equity market capitalisation in the world
The boards of directors of HDFC Bank and HDFC have cleared the proposal of their merger. After the reverse merger, the 44-year-old institution HDFC Ltd would cease to exist from July 1 onwards. Here’s the combined company’s size, profit, employee count, and weightage on stock indices:
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HDFC Bank-HDFC Merger: Market Valuation
The merger of HDFC Bank and HDFC creates a lender that ranks fourth in terms of equity market capitalisation in the world, behind JP Morgan Chase & Co., Industrial and Commercial Bank of China Ltd (ICBC) and Bank of America Corp, according to data compiled by Bloomberg. It’s valued at about $172 billion.
HDFC Bank-HDFC Merger: Total Business
The total business of the merged entity stood at Rs 41 lakh crore at the end of March 2023. With the merger, the net worth of the entity would be over Rs 4.14 lakh crore. The proposed entity will also have a combined asset base of around Rs 18 lakh crore.
HDFC Bank said the larger net worth would allow a greater flow of credit into the economy. It will also enable the underwriting of larger ticket loans, including infrastructure loans and contribute further to nation-building and employment generation.
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HDFC Bank-HDFC Merger: Total Profit
The combined profit of both entities was to the tune of about Rs 60,000 crore at the end of March 2023.
HDFC Bank-HDFC Merger: Weightage On Stock Indices
The combined shares of the HDFC twins will have the highest weighting on the indices at close to 14 per cent, much higher than the present index heavyweight Reliance Industries with a 10.4 per cent weightage.
HDFC Bank-HDFC Merger: Total Customers, Branches, Employees
All employees of HDFC Ltd become HDFC Bank employees. The new entity will also have around 120 million customers, which is greater than the population of Germany. It will also increase its branch network to over 8,300 and boast of total headcount of over 1,77,000 employees.
“Saturday, July 1, 2023, to be the ‘Effective Date’ of the composite scheme of amalgamation, on which date the certified order of the NCLT sanctioning the Scheme will be filed by HDFC Investments, HDFC Holdings, HDFC Limited and HDFC Bank with the RoC,” HDFC Bank said in a regulatory filing on Friday.
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The board of directors of HDFC Bank in consultation with the board of directors of HDFC Limited has fixed July 13, 2023, for determining the shareholders of HDFC Ltd who would be issued and allotted the shares of HDFC Bank, it added.
Besides, July 13 has been fixed for the continuation of warrants of HDFC Limited in the name of HDFC Bank.
The board has fixed July 12, 2023, for the transfer of non-convertible debentures while July 7 for the transfer of commercial papers of HDFC Ltd in the name of HDFC Bank.
Termed as the biggest transaction in the history of India Inc, HDFC Bank on April 4, 2022, agreed to take over its parent, which is the largest pure-play mortgage lender, in a USD 40-billion all-stock deal, creating a financial services titan with a combined asset of over Rs 18 lakh crore.
With the deal getting effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold.
HDFC Bank CEO & MD Sashi Jagdishan said the combined strength will enable to create a holistic ecosystem of financial services.
“We’re truly happy to welcome the talented team of HDFC Ltd into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence. As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry,” he said.
HDFC Bank said it also marks the transformation of the bank into a financial services conglomerate that offers a full suite of financial services, from banking to insurance, and mutual funds through its subsidiaries. So far, the bank was a distributor for these products.
Post-merger, the key HDFC Bank subsidiaries include HDFC Securities Ltd, HDB Financial Services Ltd, HDFC Asset Management Co Ltd, HDFC ERGO General Insurance Co Ltd, HDFC Capital Advisors Ltd and HDFC Life Insurance Co Ltd.
(With Inputs From Agencies)
