The Board of Directors of IDFC and IDFC Financial Holding approved merger between both the entities and announced a share exchange ratio of 155 shares of IDFC FIRST Bank for every 100 shares held in IDFC.
The share swap ratio will create a premium of about 20 per cent on the closing market price of the shares of IDFC. The merger of IDFC with IDFC FIRST Bank will create value for shareholders. The Board of Directors of both the companies approved composite Scheme of Amalgamation in its board meeting on July 3.
Anil Singhvi, Chairman, IDFC said as IDFC looks to conclude the last phase of its corporate restructuring, the merger with IDFC First Bank will help create a financial services powerhouse enabling seamless delivery of services to customers. It will augment operational efficiency for the merged entity and create synergies for shareholders.
IDFC was granted in-principle approval by the Reserve Bank of India to set up a bank in April 2014, leading to the creation of IDFC Bank and IDFC Financial Holding Company. All the regulated businesses were transferred to the IDFC FHCL as per applicable law following the approval.
IDFC Bank strengthened its business following the merger with the Capital First in December 2018 and was subsequently renamed IDFC FIRST Bank. As a promoter, IDFC was required to hold a minimum of 40 per cent equity in the Bank for five years till September 30, 2020.
After getting in principle approval to merge IDFC and IDFC FHCL with the Bank in December 2021, the Board of IDFC sold AMC business to Bandhan Group. IDFC has created huge value for its shareholders and the market capitalisation has gone up from ₹8,000 crore to ₹17,000 crore.