Reserve Bank of India has given its nod for the reverse merger of IDFC Ltd with its banking subsidiary IDFC First Bank.
The boards of IDFC First Bank and IDFC have authorised the reverse merger in July.
“….IDFC Limited and IDFC Financial Holding Company (IDFC FHCL) have received letters dated December 26, 2023 from RBI whereby RBI has conveyed its ‘No Objection’ to the composite scheme of amalgamation, subject to compliance with the terms specified therein,” IDFC Ltd mentioned in a regulatory submitting.
As a part of the composite scheme of amalgamation, IDFC FHCL would first merge with IDFC after which IDFC into IDFC First Bank Ltd.
The scheme stays topic to different statutory and regulatory approvals, together with from the National Company Law Tribunal and the respective shareholders and collectors of the businesses concerned below the relevant legal guidelines, it mentioned.
Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for each 100 shares she/he holds within the financial institution. Both shares have a face worth of Rs 10 every.
Post the merger, the standalone e-book worth per share of the financial institution will enhance by 4.9 per cent, as calculated on the audited financials as of March 2023, it mentioned, including that as of June 2023, IDFC via its non-financial holding firm, owned 39.93 per cent in IDFC First Bank.
IDFC was an infra lender within the personal sector house, and following its greater friends like ICICI and IDBI, it additionally launched a banking subsidiary in 2015 — IDFC Bank — however couldn’t make a mark as the opposite two might do.
Like HDFC Bank, the merged IDFC First Bank will even don’t have any promoter entity, however absolutely owned by institutional and public shareholders.
IDFC started as an infra lender in 1997. It received in-principle approval from the RBI to arrange a financial institution in April 2014, and in October 2015, it launched IDFC Bank when on-tap licensing started, following which loans and liabilities of IDFC had been transferred to the financial institution.
In December 2018, it took over Capital First, a shopper and MSME-focused non-bank since 2012, and was renamed as IDFC First Bank and have become a full-service common financial institution.
