The country's largest housing finance company HDFC Ltd will merge with the country's largest private sector lender HDFC Bank, according to a regulatory filing.
The scheme of amalgamation will be subject to various regulatory approvals, including from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), HDFC Bank said in the filing on Monday.
Shares of HDFC and HDFC Bank rallied up to 12 per cent in the morning trade on Monday as investors lapped up the announcement of their proposed merger.
In the first hour of trading, the scrip of HDFC skyrocketed 12 per cent to Rs 2,754.60 on the BSE and the market valuation rose to Rs 5,02,017.47 crore. It had opened at Rs 2,550-level on the bourse.
Similar trends were seen on the NSE also, where the stock climbed over 12 per cent to Rs 2,754.70.
In tandem, the shares of HDFC Bank surged over 9 per cent to Rs 1,647.55 points after opening at Rs 1562.30 points on the BSE. The leading lender's market capitalisation stood at Rs 9,13,905.15 crore on the bourse.
On the NSE too, the bank's shares were up nearly 10 per cent at Rs 1,650.85 points.
Ahead of opening of the markets on Monday, HDFC, the country's largest housing finance company, announced that it will merge with leading private sector lender HDFC Bank.
With the HDFC twins soaring, the 30-share Sensex climbed and crossed the 60,000-level. The benchmark index was up nearly 2 per cent or 1,177 points at 60,453.69 points.
Under the proposed deal, share exchange ratio will be 42 equity shares each of HDFC Bank for every 25 equity shares held in HDFC Ltd.
"... after considering the recommendation and report of the Audit Committee and the Committee of Independent Directors, the Board of Directors of HDFC Bank, at its meeting held on April 4, 2022 approved a composite scheme of amalgamation HDFC Investments and HDFC Holdings, into and with Housing Development Finance Corporation Limited (HDFC Ltd); and HDFC Ltd into HDFC Bank, and their respective shareholders and creditors," the filing said.
