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The Reserve Bank of India (RBI) has approved the proposal to merge IDFC Limited with its banking subsidiary IDFC First Bank. The boards of directors of IDFC and IDFC First Bank had approved their merger proposal in July itself.
What the company said: IDFC Limited and IDFC Financial Holding Company (IDFC FHCL) have not raised any objection to the overall scheme of merger in the letters received from the RBI on December 26, IDFC Limited said in a stock market disclosure. Under the merger plan, first IDFC FHCL will be merged with IDFC. Thereafter IDFC will be merged into IDFC First Bank Limited. According to the regulatory filing, the merger is subject to the approval of the National Company Law Tribunal (NCLT) and other statutory and regulatory approvals from the relevant shareholders and creditors of the incorporated companies under applicable law.
How many shares you will get: Under the proposed merger plan, an IDFC shareholder will get 155 shares for every 100 shares held in the bank. Both the shares have a face value of Rs 10. After the merger, the bank’s value per share on a standalone basis will increase by 4.9 percent. As of June, IDFC through its non-financial holding company holds 39.93 percent stake in IDFC First Bank.
IDFC launched a banking subsidiary IDFC Bank in the year 2015 but it could not make any significant mark. After the merger, IDFC First Bank will not have a promoter entity but will be wholly owned by institutional and public shareholders.
Share status: Let us tell you that there was a slight rise in the shares of IDFC Limited on Wednesday. This share is Rs. closed at 124.95. The stock was up 0.48% from a day earlier. Whereas, the share price of IDFC First Bank is Rs 88.87. The stock closed with a gain of 0.38%.