On September 27, IDFC Limited announced the approval of its Board of Directors for the amalgamation of its subsidiaries. The Board has finalized a composite scheme to merge IDFC Financial Holding Company Limited (IDFC FHCL) with IDFC Limited, followed by the merger of IDFC Limited with IDFC FIRST Bank Limited.
The National Company Law Tribunal (NCLT) in Chennai sanctioned this amalgamation scheme on September 25, 2024. The mergers will take effect on the following dates:
- September 30, 2024: Merger of IDFC FHCL into IDFC Limited.
- October 1, 2024: Merger of IDFC Limited into IDFC FIRST Bank.
Key Dates and Details:
- Record Date: October 10, 2024, will determine the IDFC shareholders eligible for share allocation in IDFC FIRST Bank.
- Share Exchange Ratio: IDFC shareholders will receive 155 equity shares of ₹10 each in IDFC FIRST Bank for every 100 equity shares of ₹10 each they hold in IDFC.
Post-Amalgamation Changes:
- IDFC FHCL and IDFC Limited will be dissolved without winding up.
- IDFC FIRST Bank will have only public shareholders.
- The offices of Directors, Key Managerial Personnel, and Statutory Auditors of IDFC FHCL and IDFC Limited will be vacated as of October 1, 2024.
- There will be no changes in the Directors or management of IDFC FIRST Bank.
- The process for canceling the RBI registration certificates for IDFC FHCL and IDFC as non-banking financial companies (NBFCs) will commence.
Earlier approvals for the merger included a nod from the majority shareholders of IDFC First Bank on May 17, 2024, and the Competition Commission of India on October 17. The Reserve Bank of India granted its no objection certificate for the amalgamation on December 27, 2023.
IDFC holds a 39.93% stake in IDFC First Bank, and the merger is expected to enhance the bank’s book value per share by 4.9%, based on audited financials as of March 31, 2023. The merger aims to simplify the corporate structure of IDFC FHCL, IDFC Limited, and IDFC First Bank, streamlining their regulatory compliance processes.
