The National Company Law Tribunal (NCLT) on Friday approved the reverse merger of mortgage leader HDFC and its subsidiaries with the group's banking arm HDFC Bank, announced last April. With this, the biggest merger in the history of India Inc has moved one step closer as the only pending approvals are from the Reserve Bank, which though has given the in-principal approval to the $40 billion mega amalgamation.
Other regulators namely the Insurance Regulatory and Development Authority and the Pension Fund Regulatory and Development Authority have already given their approvals for this deal. The deal has also been okayed by the exchanges BSE and NSE last December. Last month, the Mumbai bench of the tribunal approved the merger of the real estate arms of HDFC with itself. Already its insurance verticals and the mutual funds' verticals have been merged with the bank.
HDFC expects the merger process to be effective from the third quarter of the next financial year as the RBI approvals are a lengthy process. "The amalgamation would create meaningful value for various stakeholders, including respective shareholders, customers, and employees, as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, amongst others," the tribunal led by Kuldip Kumar Kareer and Shyam Babu Gautam said in their 23-page order.
The merged 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.