RBI approves merger of IDFC with IDFC First Bank
New Delhi, December 27
The RBI has given its nod for the reverse merger of IDFC Ltd with its banking subsidiary IDFC First Bank. The Boards of IDFC First Bank and IDFC had approved the reverse merger in July.
“….IDFC Limited and IDFC Financial Holding Company (IDFC FHCL) have received letters dated December 26, 2023 from RBI whereby RBI has conveyed its ‘no objection’ to the composite scheme of amalgamation, subject to compliance with the terms specified therein,” IDFC Ltd said in a regulatory filing.
As part of the composite scheme of amalgamation, IDFC FHCL would first merge with IDFC and then IDFC into IDFC First Bank Ltd.
The scheme remains subject to other statutory and regulatory approvals, including from the National Company Law Tribunal and the respective shareholders and creditors of the companies involved under the applicable laws, it said.
Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each.
Post the merger, the standalone book value per share of the bank will increase by 4.9%, as calculated on the audited financials as of March 2023, it said, adding that as of June 2023, IDFC through its non-financial holding company, owned 39.93% in IDFC First Bank.
IDFC was an infra lender in the private sector space, and following its bigger peers like ICICI and IDBI, it also launched a banking subsidiary in 2015 — IDFC Bank — but could not make a mark as the other two could do.
Like HDFC Bank, the merged IDFC First Bank will also have no promoter entity, but fully owned by institutional and public shareholders. — PTI
Scheme of amalgamation
- As part of the composite scheme of amalgamation, IDFC FHCL would first merge with IDFC and then IDFC into IDFC First Bank Ltd
- Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each
- The merger is subject to other statutory and regulatory approvals, including from the National Company Law Tribunal and the respective shareholders and creditors of the companies involved under the applicable laws
