On Monday, April 4, the board of Housing Development Finance Corporation (HDFC) Ltd announced its merger with HDFC Bank. The decision has been taken in a board meeting held today.
The two subsidiaries of HDFC Ltd, HDFC Investments & HDFC Holdings will also be merged with the HDFC Bank. HDFC will have a 41% stake in HDFC Bank, as per a regulatory filing. The merger is likely to be completed by the third-fourth quarter of FY24.
“This is a merger of equals. We believe that the housing finance business is poised to grow in leaps and bounds due to the implementation of RERA, infrastructure status to the housing sector, government initiatives like affordable housing for all, amongst others,” said Deepak Parekh, Chairman HDFC Ltd.
“Over the last few years, various regulations for banks and NBFCs have been harmonised, thereby enabling the potential merger. Further, the resulting larger balance sheet would allow underwriting of large ticket infrastructure loans, accelerate the pace of credit growth in the economy, boost affordable housing and increase the quantum of credit to the priority sector, including credit to the agriculture sector,” Parekh further added.