HDFC Shares Jump 13%, HDFC Bank Jumps 9% Post Merger Announcement

Shares in HDFC and HDFC Bank both jumped post a merger announcement. Shares of HDFC were up 13%, while HDFC Bank shares gained 9%.

"We refer to our intimation made today i.e. on April 4, 2022, informing that the Board of Directors of Corporation at its meeting held today inter alia approved a composite scheme of amalgamation of: (i) HDFC Investments Limited and HDFC Holdings Limited, wholly-owned subsidiaries of the Corporation, with and into the Corporation and (ii) the Corporation with and into HDFC Bank Limited, and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013, the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other rules and regulations framed thereunder," a notice by the exchanges read.

The share merger ratio has been fixed at 42 shares of HDFC Bank to 25 shares of HDFC. The proposed transaction will enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base.