Synopsis: This article details the approval of the merger between IDFC Limited and IDFC First Bank by the shareholders. The National Company Law Tribunal (NCLT) meeting, the overwhelming shareholder support, and the regulatory green light from the Reserve Bank of India are highlighted, alongside the merger's specifics and market reactions.
In a significant move, shareholders of IDFC First Bank have given their nod to the merger scheme with IDFC Limited. The approval came during a meeting convened by the National Company Law Tribunal (NCLT) on May 17, focusing on the comprehensive amalgamation plan.
The meeting specifically addressed the merger of IDFC Financial Holding Company with IDFC Limited, and subsequently, the merger of IDFC Limited with IDFC First Bank. According to a regulatory filing by IDFC First Bank, the resolution was passed with a requisite majority, with more than three-fourths of the equity shareholders in value voting in favor.
Moreover, the merger scheme saw overwhelming support from the Non-Convertible Debenture (NCD) holders, with 99.99% voting in favor through remote e-voting and e-voting during the meeting. This strong backing underscores the confidence in the strategic benefits of the merger.
The Reserve Bank of India (RBI) had already given its approval for the reverse merger in December 2023. This merger was initially greenlit by the boards of IDFC Financial Holding Co. Ltd, IDFC Ltd, and IDFC First Bank in July 2023.
Under the terms of the reverse merger, IDFC shareholders will receive 155 shares of IDFC First Bank for every 100 shares held. Both IDFC Ltd and IDFC First Bank shares have a face value of Rs 10 each.
Market reactions to the merger news were positive, with IDFC First Bank shares ending 0.26% higher at Rs 77.44 apiece on the BSE on Saturday.
This merger marks a strategic consolidation in the financial sector, promising enhanced operational efficiencies and a stronger market presence for the unified entity.
Related Questions
1. What was the outcome of the shareholders' meeting regarding the merger scheme?
The resolution for the merger scheme was passed with a requisite majority, with more than three-fourths of the equity shareholders in value voting in favor.
2. What was the level of support from Non-Convertible Debenture (NCD) holders for the merger scheme?
NCD holders showed overwhelming support, with 99.99% voting in favor of the merger scheme through remote e-voting and e-voting during the meeting.
3. When did the Reserve Bank of India (RBI) give its approval for the reverse merger?
The RBI gave its approval for the reverse merger in December 2023.
4. What is the exchange ratio for IDFC shareholders in the reverse merger?
Under the terms of the reverse merger, IDFC shareholders will receive 155 shares of IDFC First Bank for every 100 shares held.
5. How did the market react to the news of the merger?
Market reactions to the merger news were positive, with IDFC First Bank shares ending 0.26% higher at Rs 77.44 apiece on the BSE on Saturday.
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