In India’s Largest Corporate Deal, IDFC First Bank to Merge with IDFC

A few days after the merging of the HDFC twins, IDFC First Bank said on Monday that its parent company, IDFC Ltd, would combine with itself in an all-stock transaction.

The reverse merger has received the approval of the boards of IDFC First Bank and IDFC.

The valuation of the combined company, which the bank did not disclose, is Rs 71,767 crore based on Monday’s BSE closing prices of the two companies.

An IDFC shareholder will receive 155 shares for every 100 shares they hold in the bank under the planned reverse merger strategy. According to a statement from IDFC First Bank, each share of stock has a face value of Rs 10.

As of June 30, 2023, the closing market price of the shares of IDFC relative to IDFC First Bank will be 20% higher as a result of the share exchange ratio.

The merger, according to IDFC Chairman Anil Singhvi, is the final stage of IDFC’s corporate restructuring and would aid in the creation of a financial services provider that provides clients with seamless service delivery. It will boost the merging company’s operational effectiveness and produce benefits for our shareholders.

According to the audited financial statements as of March 2023, the standalone book value per share of the bank will rise by 4.9% following the merger, it said, adding that as of June 2023, IDFC through its non-financial holding company controlled 39.93% of IDFC First Bank.

The market capitalization of IDFC First Bank was Rs 54,311.48 crore at today’s closing after the stock increased 3.2% to Rs 81.94 on the BSE. The market capitalization of IDFC was Rs 17,456 crore after its counter increased 6.3% to Rs 109.10, bringing the combined value to Rs 71,767 crore.

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