HDFC and HDFC Bank merger to be completed by July 2023; bank to add more branches in FY24

The bank's top management in a conference call today informed that the company has already received approval from the shareholders of HDFC and HDFC Bank, the Securities and Exchange Board, the Competition Commission of India, and the Pension Fund Regulatory and Development Authority

After the merger, existing shareholders of HDFC will own 41 per cent of the bank, while HDFC Bank will be 100 per cent owned by public shareholders. HDFC shareholders will get 42 shares of HDFC Bank for every 25 shares they hold. Photo: PTI

HDFC Merger: The merger of HDFC and HDFC Bank will be completed by July 2023, the bank's top management announced in a conference call on Sunday. Once merged, the proposed entity will have a combined asset value of around Rs 18 lakh crore. The management also informed that the company has already received approval from the shareholders of HDFC and HDFC Bank, the Securities and Exchange Board, the Competition Commission of India, and the Pension Fund Regulatory and Development Authority. These approvals are essential to the merger of HDFC and HDFC Bank.

The merger of both entities has been on the cards for some time. After the merger, existing shareholders of HDFC will own 41 per cent of the bank. On the other hand, HDFC Bank will be 100 per cent owned by public shareholders. HDFC shareholders will get 42 shares of HDFC Bank for every 25 shares they hold. In the conference call, HDFC management also informed that it would continue its branch expansion in the new fiscal year. The bank executive director, Kaizad Bharucha, in February said that that the bank would add 1,200 and 1,300 branches a year over the next two years.

The management said that the economic activity in the fourth quarter was good and that consumers are moving towards higher-value products.

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It further said that the cost of funds would inch up in coming quarters.

The bank didn't rule out the the risk of global slow down.

HDFC Bank released its results on April 15 and announced a 19.8 per cent year-on-year rise in its standalone net profit at Rs 12,047.45 crore for the quarter ended March 2023 (Q4FY23).

In its filing, the bank said that it had clocked a net profit of Rs 10,055.18 crore in the year-ago period.

The bank's total income for the quarter jumped 31 per cent YoY to Rs 53,850.54 crore compared with Rs 41,085.78 crore reported in the corresponding quarter of FY22.

Apart from it, the bank also saw its net revenue jump 21 per cent to Rs 32,083.0 crore for the quarter ended March 31, 2023, against Rs 26,509.8 crore for the quarter ended March 31, 2022.
The board also recommended a dividend of Rs 19 per share, the record date for which is May 16.

The bank in its regulatory filing on Saturday said that the HDFC board has given the go-ahead to raise Rs 50,000 crore from bonds during the current fiscal year to fund business growth.

The board of directors of "HDFC Bank at its meeting held today, has approved the issuance of Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long-Term Bonds (Financing of Infrastructure and Affordable Housing) up to total amount of Rs 50,000 crores over the period of next twelve months through private placement mode," it said.

(With inputs from PTI)

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