The decks were cleared for the creation of a financial giant on Friday when the National Company Law Tribunal (NCLT) approved the merger of HDFC Ltd into HDFC Bank.

The amalgamation has already received approvals from the Competition Commission of India, Reserve Bank of India, stock exchanges, shareholders and the insurance and pension regulators.

HDFC and HDFC Bank had announced their merger in April last year — and said the exercise would be completed by the second quarter or third quarter of the next fiscal.

Under the terms of the merger, every HDFC shareholder will get 42 shares of HDFC Bank for 25 shares of HDFC.

The companies had also said that after the merger, HDFC Bank will be owned 100 per cent by public shareholders and existing shareholders of HDFC will own 41 per cent of the lender.

While the announcement came after market hours, the HDFC Bank share ended at Rs 1,572.55 on the BSE — a gain of 1.36 per cent or Rs 21.10 over the last close whereas the HDFC counter rose 1.14 per cent or Rs 28.80 to close at Rs 2,561.45. At close, the duo had a combined market capitalisation of Rs 13.46 lakh crore.

With the Mumbai-bench of the NCLT clearing the merger, the focus has shifted to the banking regulator which has to decide on certain relaxations sought by HDFC Bank.

The private sector lender had requested a phased approach to meet the cash reserve ratio, which is the portion of deposits that has to be maintained with the RBI; the statutory liquidity ratio, which is the proportion of deposits in government securities and priority sector lending requirements.

At a shareholders meeting of HDFC last year, chairman Deepak Parekh had said HDFC Bank is engaged with the RBI on the forbearance, but asked them not to worry.

Funds drive

HDFC Ltd on Friday said its board would consider raising funds through non-convertible debentures (NCDs) in tranches aggregating to Rs 57,000 crore.

“A meeting of the board of directors of the corporation is scheduled to be held on Monday, March 27, 2023 to consider issuance of unsecured redeemable non-convertible debentures, in various tranches, under a shelf placement Memorandum, aggregating Rs 57,000 crore on a private placement basis...,” HDFCsaid in a regulatory filing.

The approval for this was granted by the shareholders at the 45th annual general meeting held on June 30.

HDFC fined

The RBI on Friday said it has imposed a penalty of Rs 5 lakh on HDFC for non-compliance with certain provisions issued by the National Housing Bank.

Giving details, the RBI said a statutory inspection of the company was conducted by the NHB with reference to its financial position as on March 31, 2020. It was revealed that the company failed to transfer certain matured deposits to the designated bank account of depositors during the period 2019-20, the RBI said in a statement.

Last lap

■ Merger announced in April 2022

■ Approvals received from competition regulator, RBI and others

■ Merger to be completed by third quarter of next fiscal

■ HDFC to raise Rs 57,000 crore