IDFC First Bank’s board approves amalgamation of IDFC with itself

IDFC First Bank Ltd. | Bank - Private | BFSI | BSE: 539437 | NSE: IDFCFIRSTB

04 Jul 2023 Evaluate

IDFC First Bank’s board of directors has approved the Scheme of Amalgamation of IDFC with itself. The boards of IDFC First Bank and IDFC have approved the reverse merger. Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each. The share exchange ratio will result in a premium of about 20 per cent on the closing market price of the shares of IDFC vis-a-vis IDFC First Bank as of June 30, 2023.

Post the merger, the standalone book value per share of the bank will increase by 4.9 per cent, as calculated on the audited financials as of March 2023. As of June 2023, IDFC through its non-financial holding company, owned 39.93 per cent in IDFC First Bank.

The merger will lead to simplification of the corporate structure of both entities by consolidating them and other subsidiaries into a single entity, helping streamline regulatory compliances. The merged IDFC First Bank will have no promoter entity, but fully owned by institutional and public shareholders. The merger scheme is subject to all requisite approvals from the Reserve Bank, Sebi, Competition Commission, National Company Law Tribunal and stock exchanges, and shareholders of both entities. The Board of Directors of bank at its meeting held on July 03, 2023, has approved the same.

IDFC First Bank provides a range of financial solutions to individuals, small businesses and corporates.