Merger raises HDFC Bank’s total business to over Rs 41 trn in FY23

HDFC’s reverse merger with its subsidiary HDFC Bank from Saturday has taken the combined entity’s total business to over Rs 41 crore, akin to SBI, the country’s largest lender.

The total business (Deposits and Advances) of State Bank of India (SBI) was Rs. 70.30 lakh crore at the end of March 31, 2023.

However, the consolidated profit is higher at Rs.60,000 crore as compared to the Rs.50,232 crore recorded by SBI in FY23.

After the merger, HDFC Bank became the fourth largest bank in the world, narrowing the gap by asset size with state-owned SBI Bank to become the second largest Indian bank.

The total business of the merged entity was Rs. 41,000 crores at the end of March 2023. With the merger, the net worth of the entity will be more than Rs. 4.14 crores.

After the merger, the share capital of HDFC Bank increased to Rs. 1,190.61 crore with the ability to increase or decrease the capital.

HDFC Investments and HDFC Holdings merged with and HDFC Limited, and were dissolved without winding up, without any further action or act, on July 1, 2023, HDFC Bank said in a regulatory filing.

HDFC Limited has been merged with and within HDFC Bank, and HDFC Limited has stood to be dissolved without winding up, without any further action or act, on July 1, 2023, effective Saturday.

With the transaction going into effect, HDFC Bank will be 100 percent owned by the general shareholders, and existing HDFC shareholders will own 41 percent of the bank. Each HDFC shareholder will receive 42 HDFC Bank shares for every 25 shares they hold.

The Board of Directors of HDFC Bank in consultation with the Board of Directors of HDFC Limited has set 13 July 2023, to determine the shareholders of HDFC Ltd, who will be issued and allotted shares of HDFC Bank.

Besides, July 13th has been set for the continuation of the Security Orders issued by HDFC Limited in the name of HDFC Bank.

The Board of Directors has set July 12, 2023, to transfer the Non-Convertible Notes while July 7 to transfer the commercial papers of HDFC Ltd in the name of HDFC Bank.

The combined entity brings together the significant complementarities that exist between the two entities and is poised to create meaningful value for the various stakeholders, including customers, employees and shareholders of both entities by increasing scale, comprehensive product offering, balance sheet flexibility and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies.

HDFC Bank on the first day after the merger went through the process of rebranding, placing its colors in all branches and offices of HDFC Ltd. of 500 offices.

HDFC’s former headquarters at Ramon House already bears the HDFC Bank brand, and officials have estimated that the entire exercise will be completed within the next 24 hours.

It should be noted that dedicated teams have been created to make the merger as smooth as possible, since it was announced on April 4 last year. As part of the US$40 billion all-share deal, the largest in Indian corporate history, HDFC Bank has committed to absorb all of the parent company’s 4,000-plus employees.