Merger of HDFC Limited and HDFC Bank

• HDFC’s board of directors has approved the merger of HDFC Bank, India’s largest private sector bank with HDFC (Housing Development Finance Corporation), India’s largest housing finance firm.

• The deal will be building the housing loan portfolio of the bank and will also be enhancing its existing customer base.

• Under the agreement that has been proposed, public shareholders will be 100 percent owning HDFC Bank, and HDFC Limited’s existing shareholders will own 41 percent stake in HDFC Bank.

• As per the share exchange ratio, for every 25 equity shares that are held by the shareholders of HDFC, they will be receiving 42 equity shares of the combined company.

• After the announcement of the agreement, HDFC Bank shares rose by 14 percent, and the share price of HDFC rose by more than 16 percent on BSE Sensex and NSE Nifty.