The Boards of IDFC First Bank Ltd. and IDFC Limited have approved their merger with each other. The share exchange ratio for the amalgamation of IDFC Limited with IDFC First Bank shall be 155 equity shares of face value of Rs 10 of IDFC First Bank for every 100 equity shares of face value of Rs 10 of IDFC Limited. As a result of the proposed merger, the standalone book value per share of the bank would increase by 4.9%, as calculated on audited financials as of March 31, 2023.
“The merger will lead to simplification of the corporate structure of IDFC FHCL, IDFC Limited and IDFC First Bank by consolidating them into a single entity and will help streamline the regulatory compliances of the aforesaid entities. The merger will help create an institution with diversified public and institutional shareholders, like other large private sector banks, with no promoter holding,” said IDFC First Bank.
IDFC Limited, an infrastructure financing institution, was allowed by RBI in April 2014 to set up IDFC Bank Limited. The bank started its operation in October 2015. The loan assets and liabilities of IDFC Limited were transferred to IDFC Bank. Capital First Limited was a MSME financing institution. On December 18, 2018, the IDFC Bank and Capital First merged, and subsequently renamed IDFC First Bank. As of June 30, 2023, IDFC Limited through its non-financial holding company has 39.93% shareholding of IDFC First Bank.
