Housing Development Finance Corporation (HDFC) Limited on Monday announced that its board at its meeting held today has approved a composite scheme of amalgamation, for the merger of into and with HDFC Limited into HDFC Bank, and their respective shareholders and creditors.
The HDFC stock rose as much as 16.5 percent to its day's high of ₹2,855.35 per share, meanwhile HDFC Bank surged 14.3 percent to its day's high of ₹1,721.85 per share on the BSE.
HDFC will acquire a 41 percent stake in HDFC Bank through the transformational merger, according to an HDFC Bank filing with the stock exchanges.
The share exchange ratio shall be 42 equity shares, credited as fully paid up, of face value of Re 1 each of HDFC Bank for every 25 fully paid-up equity shares of face value of ₹2 each of the corporation.
The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of FY24. HDFC said the Proposed Transaction shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base.
HDFC Bank was up 10 percent at ₹1,656.45 per share while HDFC was up 9.3 percent at ₹2,678.90. In comparison, the Sensex was up 2.25 percent or 1,335 points at 60,611.74.
An average of 45 analysts polled by MintGenie have a ‘strong buy’ rating on the stock of HDFC Bank.