The Infrastructure Development Finance Company (IDFC) has received approval from the Competition Commission of India (CCI) for its merger with IDFC First Bank, a regulatory filing stated on October 17.
“…the CCI vide its letter dated today, i.e. October 17, 2023 has communicated that it has considered and approved the combination under Green Channel Route,” IDFC said.
The merger between the development finance institution and the private lender had received approval from the board of directors of IDFC and IDFC First Bank on July 3.
The proposed amalgamation would, however, come into effect only after it receives nod from statutory and regulatory bodies such as the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and the National Company Law Tribunal (NCLT).
The approval of stock exchanges, as well as the respective shareholders and creditors of IDFC and IDFC First Bank, would also be necessitated for the merger to come into effect.
IDFC held a stake of 30.93 percent in IDFC First Bank through its non-financial holding company, as of June 30, 2023. The two entities have set a target to complete the amalgamation in this fiscal, and agreed to a ratio of the deal at “155:100”.
Under the proposed merger, shareholders of IDFC will get 155 shares of IDFC First Bank for every 100 shares held in the former. “The share exchange ratio for the amalgamation of IDFC Limited with IDFC First Bank shall be 155 equity shares of face value of ₹10/- each fully paid-up of IDFC First Bank for every 100 equity shares of face value of ₹10/- each fully paid-up of IDFC Ltd,” said IDFC First Bank said in a regulatory filing on July 3.
The decision came in the backdrop of Housing Development Finance Corporation (HDFC) completing the merger with its banking arm HDFC Bank on July 1.
In the trading session on October 17, IDFC First Bank’s shares settled at ₹91.63, up 0.79 percent as against the previous day’s close.
