First Bank & FHCL Merger: IDFC Limited and IDFC-FHCL will merge, approval has been given for the merger of the company…

First Bank & FHCL Merger: The Board of Directors of IDFC Limited has approved the merger of the company with IDFC First Bank and IDFC Financial Holding Company Limited (IDFC FHCL). Giving this information, IDFC Limited said that the merger has been approved by the Chennai Bench of the National Company Law Tribunal (NCLT).

Important events related to the merger

30 September: IDFC FHCL will be merged into IDFC Limited.

1 October: IDFC Limited will be merged into IDFC First Bank.

Record date: The record date to determine the IDFC shareholders eligible for allotment of shares in IDFC First Bank is October 10.

Share exchange ratio: IDFC shareholders will get 155 equity shares of Rs 10 per share in IDFC First Bank for every 100 equity shares held by them.

Post-merger changes:

1. There will be no change in the directors and management of IDFC First Bank.
2. IDFC FHCL and IDFC Limited will be dissolved without winding up and only IDFC First Bank will have public shareholding.
3. Directors, key managerial level officers and auditors of IDFC FHCL and IDFC Limited will step down from October 1.
4. Proceedings for cancellation of RBI registration certificate as NBFC for IDFC FHCL and IDFC Limited will be initiated soon.

The board had approved in July 2023

In July 2023, the boards of directors of IDFC FHCL, IDFC and IDFC First Bank approved the merger proposal. IDFC Bank was granted license by RBI along with Bandhan Bank in 2014.

In 2018, IDFC Bank Limited and Capital First Limited announced the completion of their merger to form IDFC First Bank.

IDFC holds 39.93% stake in IDFC First Bank

IDFC holds 39.93% stake in IDFC First Bank through its non-financial holding company. As calculated based on audited financial data as of March 31, 2023, the book value per share of the bank will increase by 4.9% after the merger.