IDFC to merge with IDFC FIRST Bank, effective October 1

IDFC Limited on September 27 announced that its Board of Directors has approved the amalgamation of its subsidiaries. It said the Board, in its meeting has approved the effectiveness of the composite scheme of amalgamation for merging IDFC Financial Holding Company Limited (IDFC FHCL) with IDFC Limited, and subsequently, IDFC Limited with IDFC FIRST Bank Limited.

IDFC further stated that the National Company Law Tribunal (NCLT), Chennai Bench, sanctioned the amalgamation scheme on September 25, 2024.

IDFC said its Board approved the merger of IDFC FHCL with IDFC Limited, effective September 30, and the merger of IDFC Limited with IDFC FIRST Bank, effective October 1.

Appointed Dates:

Appointed Date 1: September 30, 2024, for the merger of IDFC FHCL into IDFC Limited.

Appointed Date 2: October 1, 2024, for the merger of IDFC Limited into IDFC FIRST Bank.

Record Date:

The record date for determining IDFC shareholders eligible for share allotment in IDFC FIRST Bank is October 10, 2024.

Share Exchange Ratio:

IDFC shareholders will receive 155 equity shares of Rs 10 each in IDFC FIRST Bank for every 100 equity shares of Rs 10 each they hold in IDFC.

Post-Amalgamation changes:

-IDFC FHCL and IDFC Limited will be dissolved without being wound up.

-IDFC FIRST Bank will have only public shareholders.

-Offices of Directors, Key Managerial Personnel, and Statutory Auditors of IDFC FHCL and IDFC Limited will be vacated as of October 1, 2024.

-No changes in Directors or management of IDFC FIRST Bank.

-Formalities for canceling RBI registration certificates for IDFC FHCL and IDFC as NBFCs will be initiated.

RBI approves IDFC-IDFC First Bank merger

The majority shareholders of IDFC First Bank approved the amalgamation of IDFC with the bank at a meeting convened by the Chennai bench of the National Company Law Tribunal on May 17, 2024.

On October 17, as per a regulatory filing, the merger had received approval from the Competition Commission of India (CCI). The first decision for the merger was taken at a July 3 Board meeting.

On December 27, 2023, IDFC said the Reserve Bank of India has given its no objection certificate (NOC) for the amalgamation of IDFC, IDFC FHCL, and IDFC First Bank.

IDFC Bank was given a licence by the RBI in 2014. In 2018, IDFC Bank and Capital First announced the completion of the merger to become IDFC First Bank.

IDFC, through its non-financial holding company, holds a 39.93 percent stake in IDFC First Bank. After the merger, the book value per share of the bank will increase by 4.9 percent, as calculated on audited financials as of March 31, 2023.

Merger aims for streamlined operations

Earlier bank, in a filing to the stock exchanges, said the merger will lead to the simplification of the corporate structure of IDFC Financial Holding Company, IDFC Ltd and IDFC First Bank by consolidating them into a single entity and will help streamline the regulatory compliances of these entities.