The bank will now get a stickier loan book and can become an aggressive lender in the mortgage loans space. The deal will ring alarm bells for other banks, who need to build scale and strength in the form of data, distribution muscle and cost of capital
Housing Development Finance Corporation (HDFC) chairman Deepak Parekh speaks during a media briefing in Mumbai on April 4, 2022. - India's largest private bank will merge with its largest mortgage lender to become a $237 billion financial giant, both companies said, as low interest rates send demand for home loans soaring.
Image: Indranil Mukherjee / AFP
Over seven years since first considering the merger of mortgage lender Housing Development Finance Corporation (HDFC) with the largest private lender HDFC Bank, the inevitable was announced on Monday, April 4.
The HDFC board has approved the merger with HDFC Bank, which would include its wholly-owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank. HDFC will own 41 percent in HDFC Bank. HDFC’s shareholders will get 42 shares of HDFC Bank for every 25 shares of the non-banking financial company (NBFC) held by them.