IDFC FIRST Bank begins process for 3-way merger

IDFC FIRST Bank begins process for 3-way merger

Shares of IDFC surged over 9% on December 31 intraday, after the IDFC First Bank board has favoured the merger of IDFC and IDFC Financial Holding Co (promoter group) with the bank.
The boards of IDFC and IDFC Financial Holding Company too have given the nod for it.
The said corporate restructuring activity will be subject to approval by the boards, shareholders and other necessary statutory/regulatory approvals.
IDFC Financial Holding Company holds 36.52% stake in the bank as of September 2021, while IDFC Holds 100% stake in IDFC FHCL.

The IDFC First Bank board has formed a panel called “Capital Raise and Corporate Restructuring Committee” to work on the terms of the merger. Its remit will be areas like finalising the scheme, valuation, and hiring advisors.
IDFC, as promoter, was required to hold 40% for five years from the date of the bank’s commencement of operations. This five-year period ended on September 30 last year.
On July 20 this year, the Reserve Bank of India said IDFC could now exit as promoter of IDFC FIRST Bank.

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