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According to a regulatory filing on Monday, India’s largest housing finance company, Housing Development Finance Corporation (HDFC), will merge with HDFC Bank.

The merger of HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited has been approved by HDFC’s board of directors. The HDFC-HDFC Bank merger is expected to take place in the second or third quarter of FY24. Following the merger, HDFC Bank will be owned entirely by public shareholders, with existing HDFC Limited shareholders owning 41% of the company.

The proposed transaction calls for a share exchange ratio of 42 HDFC Bank equity shares for every 25 HDFC Ltd equity shares.

“The Board of Directors of HDFC Ltd and the Board of Directors of HDFC Bank, at their respective meetings today, approved an all-stock amalgamation of HDFC with HDFC Bank,” said Deepak Parekh, Chairman of HDFC. The merger is subject to the approval of HDFC and HDFC bank shareholders, respectively.”

Furthermore, he stated, “The HDFC-HDFC Bank merger will have no effect on HDFC Ltd employees.”

“This is a joint venture of equals.” “We believe that the housing finance industry will grow by leaps and bounds as a result of RERA, infrastructure status for the housing sector, government initiatives such as affordable housing for all, and other factors,” Parekh added.

“Housing finance business is poised to grow. The merger will accelerate the pace of credit growth,” Mr Parekh said later in the press conference.

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