IDFC First Bank to merge with IDFC, share distribution ratio fixed at 155:100

IDFC First Bank said on Monday its board had approved its merger with IDFC Ltd, subject to regulatory approvals. IDFC First Bank said its proposed deal would boost the bank's standalone book value by 4.9% as of March 31, 2023 and aims to increase its balance sheet by 20-25% per year in the near to medium term.

It added that the proposed merger will unify IDFC FHCL, IDFC Ltd and IDFC First Bank, simplifying their corporate structure and easing regulatory compliance.

In an exchange filing, IDFC First Bank informed, "The Share Exchange Ratio for the amalgamation of IDFC Limited into and with IDFC FIRST Bank shall be 155 equity shares (credited as fully paid-up) of face value of ₹ 10/- each of IDFC FIRST Bank for every 100 fully paidup equity shares of face value of ₹ 10/- each of IDFC Limited."

It informed that the merger is subject to the receipt of requisite approvals from the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), the Competition Commission of India, the National Company Law Tribunal, BSE Limited and the National Stock Exchange of India Limited and other statutory and regulatory authorities, and the respective shareholders, under applicable laws.

"The Board of Directors of the Bank has also accorded approval for the execution of an implementation agreement between IDFC Limited and IDFC FIRST Bank “Implementation Agreement”), which, inter alia sets out the manner of implementing the Proposed Transaction contemplated under the Scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties in relation to the Proposed Transaction," it further added.

This comes days after Housing Development Finance Corp merged with HDFC Bank in a $40 billion deal, the largest in India’s corporate history.

(With agency inputs)