HDFC Ltd and HDFC Bank Announce Merger Expected to be Completed by FY 2024

The Indian banking sector is poised for significant changes as HDFC Ltd, the country's largest private lender, and its largest shareholder, HDFC Bank, announced their plans to merge. According to regulatory filings, the merged entity will become the country's second most valuable listed company, with a combined loan book of $238 billion and a significant presence in the mortgage lending space. The move is expected to create opportunities for other shadow lenders to join the mainstream finance sector.

Key Takeaways:

• The HDFC Ltd-HDFC Bank merger is expected to be completed by the second or third quarter of FY 2024, as announced by the two companies.
• The merged entity will have a combined loan book of $238 billion, with 27% of it being home loans.
• HDFC Bank's 68 million-plus customers will be able to avail home loans as a core product post-merger, while HDFC will cater to a diverse array of credit requirements.
• The merger will allow HDFC Bank to reduce its exposure to unsecured loans and enable the underwriting of large-ticket infrastructure loans.
• RBI's November 2021 guidelines enabled the merger by allowing shadow lenders with over Rs 500 billion in assets to convert into banks.
• HDFC Chairman Deepak Parekh had considered a merger with HDFC Bank as far back as 2015.

Statistics:

• The HDFC Ltd-HDFC Bank merger is expected to create a combined entity with a loan book of $238 billion.
• Home loans will account for 27% of the merged entity's loan book.
• HDFC Bank has 68 million-plus customers.
• The merged entity will be one of the biggest banks in the world.
• HDFC Ltd will acquire 41% in HDFC Bank through its units, HDFC Investments, and HDFC Holdings.

Sources:

• "HDFC Bank, HDFC Ltd plan merger, creating India's second-most valuable listed company" by [Contify.com](https://contify.com/)
• "HDFC, HDFC Bank in $18.7 billion merger to create India's biggest bank" by [Yourstory Media Private Limited](https://yourstory.com/)