IDFC First Bank to merge with IDFC, makes India's largest corporate deal
IDFC First Bank has announced merger of its parent IDFC Ltd with itself in an all-stock transaction, marking another major deal in the Indian banking space days after the amalgamation of the HDFC twins. The boards of IDFC First Bank and IDFC have approved the reverse merger. As per the Bank, the merger will lead to simplification of the corporate structure of IDFC FHCL, IDFC Limited and IDFC FIRST Bank by consolidating them into a single entity and will help streamline the regulatory compliances of the aforesaid entities.
The deal is subject to approvals from India’s key regulatory authorities, including the Reserve Bank of India, Securities and Exchange Board of India and India’s stock exchanges. The share exchange ratio for the amalgamation will be 155 equity shares of face value of Rs. 10 of IDFC First Bank for every 100 equity shares of face value of Rs. 10 of IDFC Ltd.
IDFC was an infra lender in the private sector space, and following its bigger peers like ICICI and IDBI, it also launched a banking subsidiary in 2015 -- IDFC Bank -- but could not make a mark as the other two could do.
The new giant, fully owned by public shareholders with no promoter entity, has a balance sheet of close to Rs. 33 lakh crore, with the assets alone sniffing at Rs. 23 lakh crore and also the largest mortgage book with close to Rs. 7 lakh crore of loans.
