HDFC Ltd and HDFC Bank complete their merger today: Take a look at what's happened so far

The merger of HDFC Ltd and HDFC Bank is completed today (July 1, 2023) and is one of the biggest mergers in Indian corporate history. Post-merger, HDFC Bank will be one of the largest banks in India by assets, with a market capitalisation of over $200 billion. The merger will create a financial services behemoth with a combined balance sheet of over $600 billion. The new entity will have a pan-India presence, with over 6,000 branches and 55,000 ATMs. It will also have a strong presence in the mortgage, insurance, and asset management businesses.

The merger is expected to create synergies of over $1.2 billion annually. This will be achieved through cost savings, revenue synergies, and cross-selling opportunities. The merger is also expected to improve the risk profile of HDFC Bank by providing it with a wider range of assets and liabilities.

The merger has been approved by the boards of both companies and by the Reserve Bank of India (RBI). It is also subject to the approval of the shareholders of both companies.

HDFC Ltd will be delisted from stock exchanges and the existing shareholders of HDFC Ltd will receive 42 shares of HDFC Bank for every 25 shares they hold. Since the merger is complete now, HDFC Ltd shareholders will hold 41 per cent in HDFC Bank.

The bank will maintain a Swap Ratio of 25:42; so for every 25 shares of HDFC Ltd, 42 shares of HDFC Bank will be given.

As per analysts, post merger, HDFC Bank has become the second-largest bank after State Bank of India in terms of credit. For the merged entity, mortgages will comprise more than 30 per cent, loans from commercial and rural banking will be around 25 per cent and more than 20 per cent from retail, with corporate loan books and others contributing 20 per cent and 5 per cent.

Sashidhar Jagdishan, MD and CEO of HDFC Bank said: "It brings me immense pleasure to announce the completion of the merger of HDFC Ltd, India's leading home loans company with HDFC Bank. This strategic move propels us towards a promising position among global financial institutions, unifying two influential brands with shared values and a mutual commitment to superior customer service.

Jagdishan further said that HDFC Life, HDFC Asset Management Company, HDFC Ergo, and HDFC Capital Advisors are joining the company as subsidiaries. "We are now able to offer you a more comprehensive and diversified range of bundled offerings across payments, savings, insurance, brokerage, loans, and investments.