"We would like to inform you that the National Housing Bank (NHB) has vide its letter dated February 19, 2018 intimated that NHB has no objection to the aforesaid amalgamation subject to its compliance with the applicable provisions of relevant acts, rules, regulations, etc in the matter," Capital First said in a regulatory filing.
Earlier in January, the company had informed the decision of the board of directors approving amalgamation of the company, Capital First Home Finance Limited, and Capital First Securities Limited (collectively, the 'Amalgamating Companies') with IDFC Bank Limited.
The amalgamation is subject to the receipt of approval from the Reserve Bank of India and other statutory and regulatory approvals, it added.
The US based PE firm Warburg Pincus backed non-banking financial company and one of the youngest private lenders IDFC Bank with this merger in an all-stock deal, are set to create a Rs 880 billion combined entity.
The share swap ratio for the merger is fixed at 139:10, meaning IDFC Bank will issue 139 shares for every 10 shares of Capital First.
The merger is likely to be completed in the next two- three quarters.
Capital First has a customer base of 3 million and a distribution network in 228 locations across the country.
It's gross and net NPA stood at 1.63 per cent and 1 per cent, respectively as on September 2017.
Post-merger, the combined entity will have an AUM of Rs 880 billion.
Currently, private equity firm Warburg Pincus holds 35.97 per cent in Capital First. Infrastructure lender IDFC, which entered the banking space in 2015, has been on the lookout to grow its retail portfolio.
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