HDFC twins may merge by April next year, says Chairman Deepak Parekh

Parekh said the voting process of shareholders on the proposed merger has received "fair amount of votes" from shareholders already

The merger with HDFC Bank may be completed by April next year, HDFC Chairman Deepak Parekh said on Wednesday.

“The bank will go back to NCLT (National Company Law Tribunal) for approval after getting the shareholders’ approval. The proposed merger of HDFC and HDFC Bank is expected to fructify by April 2023,” he said at an event in New Delhi.

Parekh said the voting process of shareholders on the proposed merger had received “fair amount of votes” from shareholders already. The merger would require 75 per cent shareholders’ approval.

Last month, NCLT had given its nod for holding a shareholders’ meeting for obtaining approval for the proposed merger of HDFC, India’s largest mortgage firm with its offspring HDFC Bank.

HDFC has also received approval from the Securities and Exchange Board of India (Sebi) for transfer of HDFC Property Ventures (HPVL), a wholly-owned subsidiary, to HDFC Bank.

The shareholder meeting would be convened on November 25, 2022, for the purpose of considering and approving the Scheme of Amalgamation, HDFC had earlier said in a regulatory filing last month.

In April this year, HDFC Bank had agreed to take over the biggest domestic mortgage lender in a deal valued at $40 billion making it the biggest transaction in India’s corporate history.

Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held. Post-merger, HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.

Parekh, at the event, said the Satyam scam was in reality a failure of chartered accountants (CAs) who failed to flag discrepancies in account books.

He said all independent directors of Satyam Computer Services functioned as rubber stamps of the company’s founder B Ramalinga Raju.

Satyam Computer Services was hit by an accounting scam perpetrated by its founder Raju that came to light in January 2009 and the once-storied company was later acquired by Tech Mahindra in the same year in April. The Rs 7,800-crore fraud came to light in January 2009 after Raju admitted to cooking up account books and inflated profits for several years.

(With PTI inputs)