HDFC twins to complete merger process by July 1, says Deepak Parekh

HDFC Chairman Deepak Parekh

The merger between the country's largest private sector bank HDFC Bank, and mortgage lender, HDFC Ltd is expected to be completed by July 1, said Deepak Parekh, Chairman, Housing Development Finance Corporation Ltd (HDFC).

"The merger is expected to be complete by July 1. Both HDFC Bank and HDFC Ltd will have separate board meetings on June 30," said Parekh.

"Each branch will start selling mortgages. We hope that the housing portfolio will be higher as the branches of HDFC Bank will do more," Parekh said.

He also said that all approvals are in place. "HDFC Ltd shares will be unlisted by July 13," said Parekh.

The mega merger

HDFC and HDFC Bank announced the decision to merge on April 4, 2022. As per the plan, HDFC will acquire a 41 percent stake in HDFC Bank through the merger.

In fact, back in 2015, Parekh said his firm could consider a merger with HDFC Bank, if circumstances were favourable. But the wait for the merger got longer with the parent putting the idea on the backburner. Parekh had said that the merger makes sense, provided there is no loss of value for shareholders.

Sashidhar Jagdishan, Managing Director, HDFC Bank, on an analyst call on May 24 said that the merger is only about a month away.

“It's now just another four or five weeks before the big day that is going to be happening,” Jagdishan said.

On March 10, in an exclusive interview with Moneycontrol, HDFC Vice Chairman and Chief Executive Officer Keki Mistry said that the merger will lead to bigger growth opportunities for the combined entity.

“Gradually, the objective is to expand housing loans from more and more branches of the bank. The growth opportunity on housing loans will be bigger in HDFC Bank (the combined entity) than HDFC,” said Mistry.

Once the deal comes into force, HDFC Bank will be 100 percent owned by public shareholders, and existing shareholders of HDFC will own 41 percent of the bank.

With the parent finally joining up with the bank, the resultant entity will emerge as a powerhouse in the Indian banking industry.