HDFC gets NHB nod for proposed merger with subsidiary bank

Mortgage major HDFC has received approval from the National Housing Bank (NHB) for its merger with subsidiary HDFC Bank, a regulatory filing said on Tuesday.

The NHB has also approved the merger of two wholly-owned subsidiaries -- HDFC Investments and HDFC Holdings Limited -- of the housing finance company with HDFC, the filing said.

"We wish to inform you that the NHB vide its letter dated August 8, 2022, has granted its no-objection to the scheme, as required pursuant to the refinance facilities availed by HDFC Ltd from NHB," HDFC said in the filing. The country's largest mortgage lender by asset size has already received approval from the Reserve Bank, Sebi and the stock exchanges (NSE and BSE) for the proposed merger between HDFC and HDFC Bank.

The merger scheme remains subject to various statutory and regulatory approvals including approvals from the Competition Commission of lndia, the NCLT and the respective shareholders and creditors of the two companies. The merged 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 FY24.

Once the deal is 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.