HDFC Board To Consider Raising Funds By NCDs On March 27

It is expected that the parent HDFC Ltd would merge into subsidiary HDFC Bank by the third quarter of the next financial year.

<div class="paragraphs"><p>HDFC Ltd. signage. (Source: BQ Prime)</p></div>
HDFC Ltd. signage. (Source: BQ Prime)

Mortgage lender HDFC Ltd. on Friday said its board would consider raising funds through non-convertible debentures in tranches aggregating 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 the issuance of unsecured redeemable nonconvertible debentures, in various tranches, under a Shelf Placement Memorandum, aggregating Rs 57,000 crore on a private placement basis...," HDFC said in a regulatory filing.

The approval for this was granted by the shareholders at the 45th Annual General Meeting held on June 30, 2022, it said.

It is expected that the parent HDFC Ltd. and its subsidiary HDFC Bank will merge by the third quarter of the next financial year.

Termed as the biggest transaction in India's corporate history, HDFC Bank agreed to take over the biggest domestic mortgage lender in April 2022 in a deal valued at about $40 billion, creating a financial services titan.

The proposed entity will have a combined asset base of around Rs 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

Once the deal is effective, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC will own 41% of the bank.

Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.

Following the merger, the combined balance sheet will be Rs 17.87 lakh crore and the net worth will be Rs 3.3 lakh crore as of the December 2021 balance sheet.

As of April 1, 2022, the market capitalisation of HDFC Bank was Rs 8.36 lakh crore ($110 billion) and that of HDFC was Rs 4.46 lakh crore ($59 billion).

Post-merger, HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.