Debt and Equity Holders Approve Merger of IDFC with IDFC First Bank
IDFC First Bank declared on May 17 that its majority shareholders have approved the merger of IDFC Ltd with the bank. This approval came amid a meeting organized by the Chennai bench of the National Company Law Tribunal. The bank detailed to the stock trades that the merger plan was passed with a significant majority. Particularly, 99.95 percent of the value shareholders, representing more than three-fourths of the total esteem of the bank’s value shareholders, voted in favor through remote e-voting and e-voting amid the assembly, in agreement with Segments 230-232 of the Companies Act, 2013. Under the proposed reverse merger plan, IDFC shareholders will get 155 offers of IDFC First Bank for each 100 offers they own. Both types of offers have a face esteem of Rs 10 each.
IDFC started as a private sector infrastructure bank and, following the example of bigger firms like ICICI and IDBI, propelled a managing an account backup, Bank, in 2015. However, it struggled to set up a strong presence. After the merger, similar to HDFC Bank, the new IDFC First Bank will not have a promoter substance. Instead, it will be totally owned by institutional and public shareholders. IDFC was established as an infrastructure bank in 1997. In October 2015, it launched IDFC Bank under the new on-tap licensing approach, transferring its credits and liabilities to the new bank.
On May 27, IDFC First Bank reported a 10 percent drop in net benefit for the fourth quarter finishing March 2024, with benefits at Rs 724 crore compared to Rs 803 crore in the same period final year. This decline was due to a significant increment in provisions. The bank’s total pay expanded to Rs 9,861 crore from Rs 7,822 crore a year prior. Interest pay rose to Rs 8,219 crore amid the quarter, up from Rs 6,424 crore in the same period final year. Net Interest Income (NII) developed by 24 percent, coming to Rs 4,469 crore in Q4 FY24, up from Rs 3,597 crore in Q4 FY23. In terms of resource quality, the bank’s gross Non-Performing Assets (NPAs) moved forward, diminishing to 1.88 percent of net propels as of March 31, 2024, from 2.51 percent at the end of March 2023.
