The Board of Directors of IDFC Limited has approved the merger of the company with IDFC First Bank and IDFC Financial Holding Company Limited (IDFC FHCL).
IDFC Limited gave this information on Friday (September 27). The company said that the merger has been approved by the Chennai Bench of the National Company Law Tribunal (NCLT) on Wednesday, September 25.
Important events related to the merger:
- 30 September: IDFC FHCL will be merged into IDFC Limited.
- 1 October: IDFC Limited will be merged with IDFC First Bank.
- Record date: The record date to determine IDFC shareholders eligible for share allotment in IDFC First Bank is October 10.
- Share Exchange Ratio: IDFC shareholders will get 155 equity shares of Rs 10/share in IDFC First Bank for every 100 equity shares they hold.
Post-merger changes:
- There will be no change in the directors and management of IDFC First Bank.
- IDFC FHCL and IDFC Limited will be dissolved without winding up and only IDFC First Bank will have public shareholding.
- Directors, key managerial level officers and auditors of IDFC FHCL and IDFC Limited will vacate their positions from October 1.
- Proceedings for cancellation of RBI registration certificate as NBFC for IDFC FHCL and IDFC Limited will be initiated soon.
The board had given approval in July 2023 In July 2023, the boards of directors of IDFC FHCL, IDFC and IDFC First Bank had approved the merger proposal. IDFC Bank was licensed by RBI along with Bandhan Bank in 2014. In 2018, IDFC Bank Limited and Capital First Limited announced the completion of their merger to form IDFC First Bank.
IDFC holds 39.93% stake in IDFC First Bank IDFC holds 39.93% stake in IDFC First Bank through its non-financial holding company. As per calculations on audited financials as of March 31, 2023, there will be a growth of 4.9% in the book value per share of the bank after the merger.
Graphics Source: VaskarAssets
