- HDFC Investments Limited (“HIL” or “the Transferor Company 1”) was incorporated on December 20, 1994 as HDFC Investments Limited with the Registrar of Companies, Mumbai (hereinafter referred to as the” Registrar of Companies”), as a public limited company, under the provisions of the Companies Act, 1956 (hereinafter referred to as the “1956 Act” ) with corporate identification number U65990MH1994PLC083933 and having its registered office at Ramon House, HT Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai – 400 020, Maharashtra, India. The Transferor Company 1 is a wholly owned subsidiary of the Transferee Company. As on March 31, 2022, the Transferor Company 1 holds 30,00,00,000 (Thirty Crore) equity shares of the face value of Re. 1/- of the Transferee Company 2. The Transferor Company 1 is primarily engaged in the business of making investments in equity shares, preference shares, venture funds, mutual funds and other securities. The Transferor Company 1 is a Systemically Important Non-Deposit Taking Non-Banking Financial Company registered with the Reserve Bank of India (hereinafter referred to as the “RBI”).
- HDFC Holdings Limited (“HHL” or “the Transferor Company 2”) was incorporated on January 17, 2000 as HDFC Holdings Limited with the Registrar of Companies, as a public limited company, under the provisions of the 1956 Act with corporate identification number U65993MH2000PLC123680 and having its registered office at Ramon House, H T Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai – 400 020, Maharashtra, India. The Transferor Company 2 is a wholly owned subsidiary of the Transferee Company. As on March 31, 2022, the Transferor Company 2 holds 10,000 (Ten Thousand} equity shares of the face value of Re. 1/- of the Transferee Company 2. The Transferor Company 2 is primarily engaged in the business of making investments in equity shares, preference shares, venture funds, mutual funds and other securities. The Transferor Company 2 is a Systemically Important Non-Deposit Taking Non Banking Financial Company registered with RBI.
- Housing Development Finance Corporation Limited (“HDFC Limited” or “the Transferee Company 1” or “the Transferor Company 3”) was incorporated on October 17, 1977 as Housing Development Finance Corporation Limited with the Registrar of Companies, as a public limited company, under the provisions of the 1956 Act with corporate identification number L70100MH1977PLC019916 and having its registered office at Ramon House, HT Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai – 400 020, Maharashtra, India. The Transferee Company is registered with the National Housing Bank (“NHB”) as a housing finance company. The Transferee Company is principally engaged in the business of providing finance to individuals, corporates and developers for the purchase, construction, development and repair of houses, apartment and commercial properties in India through its branches in India and overseas offices. The Transferee Company is a promoter of the Transferee Company 2 and holds 86,46,15,834 (Eighty Six Crore Forty Six Lakh Fifteen Thousand Eight Hundred and Thirty Four) equity shares of the face value of Re. 1/- (Rupee One only) of the Transferee Company 2 (as on March 31, 2022). The Transferee Company along with the Transferor Company 1 and the Transferor Company 2, as on March 31, 2022, holds approximately 21% (Twenty One per cent.) of the paid-up share capital of the Transferee Company 2. The equity shares of the Transferee Company are listed on BSE Limited (“SSE”) and National Stock Exchange of India Limited (” NSE”) (collectively hereinafter referred to as the “Stock Exchanges “). The Transferee Company’s Indian Rupee denominated bonds overseas are listed on the London Stock Exchanges’ regulated market. The secured debentures issued by the Transferee Company, from time to time, are listed on the Wholesale Debt Market segment of the Stock Exchanges. Further, the commercial papers issued by the Transferee Company are also listed on the Stock Exchanges. The warrants issued by the Transferee Company are also listed on the Stock Exchanges.
- HDFC Bank Limited (“HDFC Bank” or “the Transferee Company 2”) was incorporated on August 30, 1994 as HDFC Bank Limited with the Registrar of Companies, as a public limited company, under the provisions of the 1956 Act with corporate identification number L65920MH1994PLC080618 and having its registered office at HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India. The Transferee Company 2 is registered with the RBI as a banking company under the provisions of the Banking Regulation Act, 1949 (“BR Act”). The Transferee Company 2 is engaged in the business of providing a range of banking and financial services including retail banking, wholesale banking and treasury operations. The equity shares of the Transferee Company 2 are listed on the Stock Exchanges. The American Depositary Receipts (ADRs) issued in respect of the equity shares of the Transferee Company 2 are listed on New York Stock Exchange. The Rupee Denominated Additional Tier I Bonds, Tier II Bonds, and LongTerm Infrastructure Bonds issued by the Transferee Company 2 are listed on the Stock Exchanges. Rupee Denominated Bonds issued by the Transferee Company 2 are listed on Singapore Exchange Securities Trading Limited. Basel Ill Compliant Perpetual Debt Instruments issued by the Transferee Company 2 are listed on Indian International Exchange (IFSC) Limited.
All the four companies are part of HDFC group.
Current structure of the group is as under:
Management of the HDFC group, through this Scheme has proposed following:
- Amalgamation of the Transferor Company 1 and the Transfeor Company 2 with and into the Transferee Company 1;
- Amalgamation of Transferor Company 3 with and into the Transferee Company 2
Restructuring of the group can be depicted as under:
Key features of the above transactions:
Key features | Transaction 1: Amalgamation of the Transferor Company 1 and the Transferor Company 2 with and into the Transferee Company 1 | Transaction 2: Amalgamation of the Transferor Company 3 and with and into the Transferee Company 2 |
Appointed Date and Effective Date | A date prior to the Appointed date and effective date for Transaction 2 | Date of filling of certified copy of approving authority being NCLT with ROC. |
Jurisdictional Authority(ies) | Securities and Exchange Board of India Limited; BSE Ltd; The National Stock Exchange of India Limited; Reserve Bank of India; Jurisdictional National Company Law Tribunal (‘NCLT’); Jurisdictional Registrar of Companies (‘ROC’); Jurisdictional Regional Director (‘RD’) NCLT appointed Official Liquidator | Securities and Exchange Board of India Limited; BSE Ltd; The National Stock Exchange of India Limited; Reserve Bank of India; Competition Commission of India Limited; Insurance Regulatory and Development Authority; The Pension Fund Regulatory and Development Authority Jurisdictional National Company Law Tribunal (‘NCLT’); Jurisdictional Registrar of Companies (‘ROC’); Jurisdictional Regional Director (‘RD’) NCLT appointed Official Liquidator |
Consideration | The Transferee Company 1 shall issue shares to the shareholders of the Transferor Company 1 and the Transferor Company 2, to the extent of holding by the Transfeor Company 1 and the Transferor Company 2 in the Transferee Company 1, in proportion to their holding in respective companies. | The Transferee Company 2 shall issue shares to the shareholders of the Transferor Company 3 as per the share exchange ratio as mentioned in valuation report issued by registered valuer. |
Accounting Treatment | Pooling of interest method; | Pooling of interest method; |
Taxation | Tax neutral transaction | Tax neutral transaction |
Pre and Post shareholding patterns of the group companies, pursuant to effectiveness of the Scheme:
Name of the Company | Pre-Scheme Shareholding | Post-Scheme Shareholding | ||
% Promoter Shareholding | % Public Shareholding | % Promoter Shareholding | % Public Shareholding | |
HDFC Bank Limited | 25.78% | 74.22% | – | 100% |
Housing Development Finance Corporation Limited | – | 100% | NA, since merged | NA, since merged |
HDFC Holdings Limited | 100% | – | NA, since merged | NA, since merged |
HDFC Investments Limited | 100% | – | NA, since merged | NA, since merged |
Resultant structure post approval of the Scheme is as under:
Purpose of group restructuring:
The Amalgamation pursuant to this Scheme would, inter alia, have the following benefits:
- The Amalgamation, through the Scheme, shall enable the Transferee Company 2 to build Its housing loan portfolio and enhance its existing customer base;
- The Amalgamation is based on leveraging the significant complementarities that exist amongst the parties to the Scheme. The Amalgamation would create meaningful value for various stakeholders including respective shareholders, customers, employees, as the combined business would benefit from increased scale, comprehensive product offering, balance sheet resiliency and the ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies, amongst others:
- The Transferee Company 2 is a private sector bank and has a large base of over 6.8 Crore customers. The bank platform will provide a well-diversified low-cost funding base for growing the long tenor loan book acquired by the Transferee Company 2 pursuant to the Amalgamation;
- The Transferee Company 2 is a banking company with a large distribution network that offers product offerings in the retail and wholesale segments. The Transferor Company 3 is a premier housing finance company in India and provides housing loans to individuals as well as loans to corporates, undertakes tease rental discounting and construction finance apart from being a financial conglomerate. A combination of the Transferor Company 3 and the Transferee Company 2 is entirely complementary to, and enhances the value proposition of, the Transferee Company 2;
- The Transferee Company 2 would benefit from a larger balance sheet and networth which would allow underwriting of larger ticket loans and also enable a greater flow of credit into the Indian economy;
- The Transferor Company 3 has invested capital and developed skills and has set up approximately 464 (Four Hundred and Sixty Four) offices across the country. These offices can be used to sell the entire product suite of both the Transferor Company 3 and the Transferee Company 2;
- The loan book of the Transferor Company 3 is diversified having cumulatively financed over 90 lakh dwelling units. With the Transferor Company 3’s leadership in the home loan arena, developed over the past 45 years, the Transferee Company 2 would be able to provide to customers flexible mortgage offerings in a cost-effective and efficient manner:
- The Transferee Company 2 has access to funds at lower costs due to its high level of current and savings accounts deposits (CASA). With the amalgamation of the Transferor Company 3 with the Transferee Company 2, the Transferee Company 2 will be able to offer more competitive housing products;
- The Transferor Company 3’s rural housing network and affordable housing lending is likely to qualify for Transferee Company 2 as priority sector lending and will also enable a higher flow of credit into priority sector lending, Including agriculture;
- The Amalgamation will result in reducing the Amalgamated Company’s proportion of exposure to unsecured loans;
- The Transferor Company 3 has built technological capabilities to evaluate the credit worthiness of customers using analytical models, and has developed unique skills in financing various customer segments. The models have been tested and refined over the years at scale and the Transferee Company 2 will benefit from such expertise in underwriting and financing of mortgage offerings;
- The Transferee Company 2 can leverage on the loan management system, comprising rule engines, IT tools and rules, agents connected through a central system;
- The Amalgamation is expected to result in bolstering the capital base and bringing in resiliency in the balance sheet of the Transferee Company 2;
- The Transferor Companies are Systemically Important Non – Deposit Taking Non – Banking Financial Companies and are also wholly owned subsidiaries of the Transferor Company 3. The Amalgamation shall result in simplified corporate structure.
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