Mumbai : Two major banks associated with the banking sector have announced their merger. Let us inform you that IDFC First Bank has organized its board meeting today, in which after getting shareholders and regulatory approval, it has announced the completion of the merger process of IDFC Limited with IDFC First Bank. It has also been told that it will be operated effectively from October 1.
As a result of the merger, for every 100 equity shares of IDFC Limited held on October 10, 2024, 155 equity shares of the Bank will be allotted. Subject to the regulatory process and approvals, the shares are expected to be credited to the shareholders of IDFC Limited on or before October 31, 2024.
IDFC Limited on September 27 announced that its Board of Directors has approved the amalgamation of its subsidiaries. It said the Board, in its meeting has approved the effectiveness of the composite scheme of amalgamation for merging IDFC Financial Holding Company Limited (IDFC…
— IDFC FIRST Bank (@IDFCFIRSTBank) September 28, 2024
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What benefits can IDFC First Bank get from this merger?
1. Simple corporate structure: After this merger, the bank will have a simple corporate structure and it will not have any holding company.
2Easy shareholding structure: Like other leading institutional Indian private sector banks, this bank will also have a shareholding structure, with no promoter holding of any kind. Even after the merger, the bank will remain a professionally managed institution.
3. Cash and Cash Equivalents: As a result of this merger, the Bank will receive cash and cash equivalents of approximately Rs 600 crore.
4. Reduction in outstanding paid up shares: 2,64,64,38,348 equity shares held by IDFC Limited in IDFC First Bank will be cancelled. Also, in return, DFC First Bank can issue 2,47,99,75,876 new equity shares to the shareholders of IDFC Limited as per the agreed swap ratio. Due to which there will be a reduction in the paid up share capital of the Bank by 16,64,62,472 equity shares, and after the transaction the paid up capital of the Bank will reduce from 7,48,27,31,991 shares to 7,31,62,69,519 equity shares.
5. This merger will lead to simplification and streamlining of regulatory compliance.
6. India is a fast growing country and this merger may also create employment opportunities in the coming decades. With a simplified shareholding and corporate structure, strong capabilities and brand, and the full range of Universal Bank services, the Bank is well positioned to move forward with the immense opportunities that India presents.
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