India’s largest private lender HDFC Bank will merge with housing finance firm HDFC Ltd, the companies said on Monday.
Shares of HDFC Ltd and HDFC Bank were up 7% and 6.4%, respectively, after the companies decided to merge. The Nifty bank index rose 2.3%, while the finance index gained 3.1%.
As part of the deal, shareholders of HDFC Ltd will receive 42 shares of the bank for 25 shares held. Existing shareholders of HDFC Ltd will own 41% of HDFC Bank.
Shares held by the housing finance company in the lender will be extinguished, making HDFC Bank a full-fledged public company.
The subsidiaries and associates of HDFC Ltd will shift to HDFC Bank, the companies said in a regulatory filing.
- Reuters with additional editing by Jim Pollard
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