HDFC to vote on merger in board meeting on October 25: Analyst explains how HDFC merger will impact markets

HDFC merger news: In a regulatory filing on Monday, HDFC Bank Limited informed that it will conduct a board meeting on October 25 to vote on merger. The voting results will be out by the first week of December 2022. 

“The Hon'ble NCLT, by way of its order dated October 14, 2022 ("Order") passed in the said Company Scheme Application has inter alia directed HDFC Bank to convene a meeting of its equity shareholders (which include public shareholders), to approve the arrangement embodied in the Scheme under Sections 230 to 232 of the Companies Act, 2013 ("Act") and other applicable provisions thereof and applicable rules thereunder, on Friday, November 25, 2022, at 02.30 p.m. (1430 hours) IST through two-way Video Conference ("VC"),” the regulatory filing read.

There will be an amalgamation of HDFC Investments Limited ("Transferor Company No. 1") and HDFC Holdings Limited ("Transferor Company No. 2") and Housing Development Finance Corporation Limited ("Transferee Company"/"Amalgamating Company") and HDFC Bank Limited ("Amalgamated Company").

“This is in connection with the Company Scheme Application No.200 of 2022 filed with the Hon'ble NCLT in relation to the Composite Scheme of Amalgamation among HDFC Investments Limited ("Transferor Company No. 1") and HDFC Holdings Limited ("Transferor Company No. 2") and Housing Development Finance Corporation Limited ("Transferee Company"/"Amalgamating Company") and HDFC Bank Limited ("Amalgamated Company") and their respective shareholders and creditors ("Scheme"),” the filing read.

What will happen if the merger gets approved: Zee Business Analysis

Zee Business Research Analyst, Nupur Jainkunia said that, if the merger gets approved,  HDFC Bank Ltd will be off the BSE and NSE list. She added that passive traders will be selling in a huge number and this will be a huge exclusion on Nifty as HDFC Ltd weighs around 5.5 per cent.

She further added that, after HDFC is off the indexes there will be a redistribution amongst the top 10 Nifty stocks for heavyweights, stocks like Reliance, ICICI bank, Infosys will be rebalanced. On completion of the whole process of HDFC merger, the HDFC stock will again see an increase.

Nupur said that with HDFC out of the list other stocks will have a chance to replace— Pidilite, Ambuja Cement, Tata power and SRF are the names in line to replace HDFC Ltd.

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