India’s biggest housing finance company HDFC Ltd to merge with HDFC Bank

India's biggest housing finance company HDFC Ltd will merge with the country's largest private lender HDFC Bank to create a banking behemoth in what is claimed to be the biggest merger in the nation's corporate history.

Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders while the existing shareholders of HDFC will own 41 per cent of the bank, according to stock exchange filings by the firms.

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

"This is a merger of equals," said Deepak Parekh, chairman of HDFC Ltd.

"We believe that the housing finance business is poised to grow in leaps and bounds due to infrastructure status to the housing sector and government initiatives like affordable housing for all, amongst others," he added.

Keki Mistry, vice-chairman and chief executive officer of HDFC, said, "This merger will make HDFC Bank a large lender even by global standards. It will make more room for FII holding in HDFC Bank."

The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of the fiscal year 2024.

The merger is subject to regulatory approvals from the RBI and other regulatory authorities.

As on date, HDFC has total assets of Rs 6.23 lakh crore while HDFC Bank has assets worth Rs 19.38 lakh crore.

HDFC Bank has a large customer base of 6.8 crore.

HDFC Ltd is a provider of home loans to low and middle-income groups under affordable housing initiatives of the government of India while HDFC Bank has a presence in more than 3,000 cities and towns through its 6,342 branches.