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Reserve Bank of India has given its nod for the reverse <keyword id="42411" type="General" weightage="20" keywordseo="merger" source="Orion">merger</keyword> of <keyword id="6361420" type="General" weightage="20" keywordseo="idfc" source="Orion">IDFC</keyword> Ltd with its banking subsidiary <keyword id="7145428" type="General" weightage="20" keywordseo="idfc-first" source="Orion">IDFC First</keyword> Bank. The boards of IDFC First Bank and IDFC have approved the reverse merger in July. "....IDFC Limited and IDFC Financial Holding Company (IDFC FHCL) have received letters dated December 26, 2023 from <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> whereby RBI has conveyed its 'No Objection' to the composite scheme of amalgamation, subject to compliance with the terms specified therein," IDFC Ltd said in a regulatory filing. As part of the composite scheme of amalgamation, IDFC FHCL would first merge with IDFC and then IDFC into IDFC First Bank Ltd. The scheme remains subject to other statutory and regulatory approvals, including from the National Company Law Tribunal and the respective shareholders and creditors of the companies involved under the applicable laws, it said. Under the proposed reverse merger scheme, an IDFC <keyword id="6388677" type="General" weightage="20" keywordseo="shareholder" source="Orion">shareholder</keyword> will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each. Post the merger, the standalone book value per share of the bank will increase by 4.9 per cent, as calculated on the audited financials as of March 2023, it said, adding that as of June 2023, IDFC through its non-financial holding company, owned 39.93 per cent in IDFC First Bank. IDFC was an infra lender in the private sector space, and following its bigger peers like ICICI and IDBI, it also launched a banking subsidiary in 2015 -- IDFC Bank -- but could not make a mark as the other two could do. Like HDFC Bank, the merged IDFC First Bank will also have no promoter entity, but fully owned by institutional and public shareholders. IDFC began as an infra lender in 1997. It got in-principle approval from the RBI to set up a bank in April 2014, and in October 2015, it launched IDFC Bank when on-tap licensing began, following which loans and liabilities of IDFC were transferred to the bank. In December 2018, it took over Capital First, a consumer and MSME-focused non-bank since 2012, and was renamed as IDFC First Bank and became a full-service universal bank.

RBI approves IDFC-IDFC First Bank merger

<ul><li><keyword id="6361420" type="General" weightage="100" keywordseo="idfc" source="Orion">IDFC</keyword> First Bank announced merger of its parent IDFC Ltd with itself in an all-stock transaction. </li><li>The boards of IDFC First Bank and IDFC have approved the reverse merger.</li><li>This is the second major deal in banking space days after the amalgamation of the HDFC twins.</li></ul>Mumbai, IDFC First Bank on Monday announced merger of its parent IDFC Ltd with itself in an all-stock transaction, marking another major deal in the Indian banking space days after the amalgamation of the HDFC twins. The boards of IDFC First Bank and IDFC have approved the reverse merger. While the bank did not provide the likely valuation of the merged entity, based on Monday's closing prices of the two companies on BSE, the valuation is Rs 71,767 crore. Under the proposed reverse merger scheme, an IDFC shareholder will get 155 shares for every 100 shares she/he holds in the bank. Both stocks have a face value of Rs 10 each, IDFC First Bank said in a statement. The share exchange ratio will result in a premium of about 20 per cent on the closing market price of the shares of IDFC vis-a-vis IDFC First Bank as of June 30, 2023. IDFC Chairman <keyword id="137177" type="General" weightage="20" keywordseo="anil-singhvi" source="Orion">Anil Singhvi</keyword> said the merger is the last phase of IDFC's corporate restructuring and will help create a financial services provider that offers seamless delivery of services to customers. It will augment operational efficiency for the merged entity and create synergies for our shareholders. Post the merger, the standalone book value per share of the bank will increase by 4.9 per cent, as calculated on the audited financials as of March 2023, it said, adding as of June 2023, IDFC through its non-financial holding company, owned 39.93 per cent in IDFC First Bank. IDFC First Bank's market capitalisation stood at Rs 54,311.48 crore at close today, after the stock rallied 3.2 per cent to Rs 81.94 on the BSE, while IDFC mcap stood at Rs 17,456 crore after its counter rallied 6.3 per cent to Rs 109.10, taking the combined value to Rs 71,767 crore. IDFC was an infra lender in the private sector space, and following its bigger peers like ICICI and IDBI, it also launched a banking subsidiary in 2015 -- IDFC Bank -- but could not make a mark as the other two could do. Effective July 1, India Inc's biggest merger came into effect when the mortgage major HDFC merged itself with its banking arm in an all-stock deal valued at USD 40 billion. Post-merger, announced on April 4, 2022, HDFC Bank is the world's fourth most valued bank with USD 200 billion in valuation after JP Morgan Chase, ICBC of China and Bank of America. The new giant, fully owned by public shareholders with no promoter entity, has a balance sheet of close to Rs 33 lakh crore, with the assets alone sniffing at Rs 23 lakh crore and also the largest mortgage book with close to Rs 7 lakh crore of loans. The merger will lead to simplification of the corporate structure of both entities by consolidating them and other subsidiaries into a single entity, helping streamline regulatory compliances, the companies said in separate but identical statements. Like HDFC Bank, the merged IDFC First Bank will also have no promoter entity, but fully owned by institutional and public shareholders. The merger scheme is subject to all requisite approvals from the Reserve Bank, Sebi, Competition Commission, National Company Law Tribunal and stock exchanges, and shareholders of both entities. IDFC began as an infra lender in 1997. It got in-principle approval from the RBI to set up a bank in April 2014, and in October 2015, it launched IDFC Bank when on-tap licensing began, following which loans and liabilities of IDFC were transferred to the bank. In December 2018, it took over Capital First, a consumer and MSME-focused non-bank since 2012, and was renamed as IDFC First Bank and became a full-service universal bank. Since the merger, the bank built a deposit franchise that has grown 36 per cent annually since then, and has reached Rs 1,36,812 crore as of March 2023. The bank has also increased its low-cost CASA ratio from 8.6 at the merger with Capital First to 49.77 per cent as of March 2023. The bank has 809 branches and runs 925 ATMs. Its loan book stood at Rs 1,60,599 crore with a balance sheet of Rs 2,39,942 crore as of March 2023. The bank closed FY23 with a net income of Rs 2,437 crore, and its capital adequacy ratio stood at 16.82 per cent. Its gross NPAs stood at 1.65 per cent and net NPA at 0.55 per cent. Overall gross NPAs, including legacy infrastructure financing book, is 2.51 per cent, and net NPA is 0.86 per cent. "We now embark on the next phase of our growth journey towards our long-term vision, and the merger will create sustainable shareholder value in the years to come," said Sanjeeb Chaudhuri, the chairman of IDFC First Bank. In a separate statement, IDFC also said its board approved the reverse merger with the bank, and said the composite scheme of amalgamation includes the merger of IDFC and IDFC Financial Holding Company with IDFC First Bank. IDFC First Bank MD V Vaidyanathan said: "We have built a strong deposit franchise, digital innovation, customer-friendly products, strong capital buffer, growing profitability and high corporate governance".

IDFC to merge with its banking arm in all-stock deal

New Delhi, May 22 () <keyword id="6986952" type="UNKNOWN" weightage="20" keywordseo="IDFC-First-Bank">IDFC First Bank</keyword> on Friday reported a consolidated net profit of Rs 76.36 crore for January-March 2020. The private sector lender had posted a loss of Rs 212 crore during the corresponding January-March quarter a year ago. Sequentially, there was a net loss of Rs 1,631.59 crore in the third quarter ended December 2019. The bank said that in view of accounting for IDFC - CFL (Capital First Ltd) merger from appointed date of October 1, 2018, the figures of the year ended March 31, 2020, are not comparable. The figures for the previous quarter/year have been regrouped wherever necessary in order to make them comparable, IDFC First Bank said in a regulatory filing. Total income during the fourth quarter of FY20 rose to Rs 4,553 crore as against Rs 3,971 crore during the same period of FY19. For the full year 2019-20, the bank witnessed widening of net loss at Rs 2,843.39 crore as against Rs 1,907.88 crore in the previous fiscal. Income during the year rose to Rs 17,962.72 crore from Rs 13,056.17 crore. On the asset front, the gross non performing assets (NPAs) or bad loans as a percentage of gross loans as on March 31, 2020 increased to 2.60 per cent from 2.43 per cent by year ago same period. However, net NPAs improved to 0.94 per cent as against 1.27 per cent. IDFC First Bank said that the board at its meeting had an enabling resolution for borrowing of funds through issue of debt instruments, on private placement basis, up to an amount not exceeding Rs 5,000 crore. The board of directors has not proposed any dividend for FY 2019-20, the bank said. Citing an RBI circular on dividend, it said banks have been advised that in an environment of heightened uncertainty caused by COVID-19, it is important that banks conserve capital to retain their capacity to support the economy and absorb losses. This restriction shall be reassessed by the Reserve Bank based on the financial results of bank, it added. The extent to which the COVID-19 pandemic will impact the bank's results will depend on future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government-mandated or elected by the bank. "The bank's capital and liquidity position is strong and would continue to be the focus area for the bank during this period," it said. The bank said as per RBI March guidelines on regulatory package, it has granted a moratorium of three months on the payment of all installments and / or interest, as applicable, falling due between March 1, 2020 and May 31, 2020 to all eligible borrowers. The bank has created additional provisions amounting to Rs 225 crore during Q4 FY2020 against the potential impact of COVID-19 on standard assets based on all the available information at this point in time. Provisions for bad loans and contingencies for the quarter under review were of Rs 412.38 crore, lower than Rs 655.31 crore parked aside a year ago. V Vaidyanathan, managing director and CEO, IDFC First Bank, said, "We are happy to inform that deposits for our Bank are coming thick and strong. In Q4 FY20, "we saw strong inflows into our bank as retail deposits increased by Rs 4,658 crore, despite the turmoil in the markets. Once the lockdown lifts, things will only get better for both lending as well as deposits as the economic activity will pick up. We are already seeing this that where locations are opening up from lockdown, demand is strong", he said. Further, by raising Rs 2,000 crore of fresh equity capital and reaching strong capital adequacy of 15.5 per cent, the bank is in a strong position to grow from here on, he said. Shares of IDFC First Bank closed 0.26 per cent down at Rs 18.85 apiece on the BSE. See Also - <a href="https://www.businessinsider.in/policy/economy/news/indias-economy-inflation-and-growth-to-take-a-hit-in-the-coming-year-says-rbi-governor/articleshow/75896010.cms">India's economy inflation and growth to take a hit in the coming year, says RBI governor</a> <a href="https://www.businessinsider.in/thelife/article/best-eid-ul-fitr-wishes-and-messages-for-facebook-and-whatsapp/articleshow/75887997.cms">Best Eid-ul-fitr wishes and messages to greet your dear ones</a>

IDFC First Bank posts Rs 76.36 cr net profit in March quarter

New Delhi, Jan 29 () IDFC First Bank on Wednesday reported a net loss of Rs 1,639 crore for the third quarter ended December 31.
 The bank, which came into existence recently after the merger of IDFC Bank and Capital First, had reported a net loss of Rs 2,504 crore for October-December period of 2018-19.
 "The bank has provided 50 per cent for the legacy stressed telecom account, and it is now time to look ahead for growth," IDFC First Bank Managing Director and CEO V Vaidyanathan said in a statement.
 Total income for the quarter was up 50 per cent to Rs 2,113 crore as compared with same period of previous fiscal, the bank said.
 Shares of IDFC First Bank on Wednesday ended 1.62 per cent higher at Rs 44 on the BSE. MSS
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IDFC First Bank reports Q3 net loss of Rs 1,639 cr

(Eds: Adding details) New Delhi, May 1 () IDFC First Bank on Friday said it will raise a fresh equity capital of Rs 2,000 crore from investors, including its promoter and a Warburg Pincus firm. The decision was taken on Friday at the meeting of its board, which approved to issue 86.24 crore shares on a preferential basis to ICICI Prudential Life Insurance Company, HDFC Life Insurance Company, Bajaj Allianz Life Insurance, Dayside Investment (Warburg Pincus group entity), and to its promoter IDFC Financial Holding Company Ltd, the bank said in a regulatory filing. Under the fundraising, the equity shares will be issued at Rs 23.19 apiece to the existing and new investors, subject to shareholders' nod and other approvals. "The bank will use this capital to power growth, to continue to invest in liabilities and asset franchise, technology and infrastructure platforms to expand reach, product suite and to improve customer experience," it said in a release. Under this fresh fundraising, qualifying for common equity tier 1 or CET1, the bank will get Rs 800 crore from its promoter IDFC Financial Holding Company Ltd, while Rs 600 crore will be infused by ICICI Prudential Life Insurance Company. HDFC Life Insurance Company, Bajaj Allianz Life Insurance Ltd and the US-based private equity fund Warburg Pincus group-affiliate Dayside Investment Ltd will pump in Rs 200 crore each into the bank. The promoter will acquire 34,49,76,282 shares and ICICI Prudential Life 25,87,32,212 units, while the rest of the three investors will buy 8,62,44,070 shares each. The private sector lender said the new capital infusion will strengthen its capital adequacy to 15.5 per cent with CET 1 ratio at 15.3 per cent (calculated on December 31, 2019, base of 13.28 per cent, substantially higher than the regulatory requirements). This will enable the bank to accelerate growth of its deposit and asset franchise, it added. V Vaidyanathan, managing director and chief executive officer, IDFC First Bank, said, "Within one year after merger (of Capital First), the bank has made strong progress across all strategic priorities and set a strong foundation for growth. The new fund with strong capital adequacy will enable us to continue to power up growth in the chosen areas. It also empowers us to navigate current market uncertainties from a position of strength." He said that in one year of merging Capital First with itself, the bank's retail lending grew 32 per cent year-on-year and retail deposits were up 157 per cent year-on-year. The merger took place in December 2018. The bank's net interest margin (NIM) increased sharply to 3.86 per cent in the third quarter of 2019-20 ended December 2019 and is expected to continue rising. The bank has built strong intellectual property in its business in a focussed manner and the opportunities for growth for the lender are unlimited, Vaidyanathan said. Having recently been rated 'FAAA' by rating agency Crisil for its fixed deposit programme of Rs 50,000 crore -- the highest safety rating by Crisil in this category, he said that with the new equity capital raise, the position is further strengthened and will help the bank raise more retail current account-saving account (CASA) and retail deposits and thereby reduce the overall cost of funds for the bank. During the fourth quarter ended March 2020, retail assets increased 32.4 per cent year-on-year to Rs 54,027 crore, it said. The lender's retail loan book as a proportion of total loans grew from 10 per cent as of March 2018 (pre-merger) to 60 per cent as on March 31, 2020, (including retail priority sector lending) and is running ahead of the 5-year guidance of 70 per cent given at the time of merger. The bank has reported strong retail asset quality with gross non-performing assets (NPA) at 2.26 per cent of the gross advances and net NPAs at 1.06 per cent at the end of the December 2019 quarter. IDFC First Bank said Dayside Investments Ltd along with Cloverdell Investment Ltd --both Warburg Pincus LLC Group entities -- together holds 47,72,64,867 equity shares, constituting 9.92 per cent of the pre-issue shareholding and 56,35,08,937 equity shares constituting 9.93 per cent of the post-issue shareholding of the bank. The total number of the bank's paid-up equity shares will be 567,23,43,720 after the issue, it said. "The net worth of the bank post the issue and as added to the net worth as of December 31, 2019, will be Rs 17,240 crore," IDFC First Bank said. The lender said the said preferential allotment shall be subject to approval of the members of the bank proposed to be sought through postal ballot by way of 'Remote E-Voting' in terms of the applicable circulars recently issued by MCA (April 2020) in view of the current extraordinary circumstances due to the COVID-19 pandemic requiring social distancing and also in accordance with relevant Sebi norms. KPM HRS

IDFC First Bank to raise Rs 2,000 cr capital from promoter, Warburg Pincus, 3 others

After IDFC demerged its <keyword id="3082511" type="UNKNOWN" weightage="20" keywordseo="financing-business">financing business</keyword> into <keyword id="62152" type="COMPANY" weightage="20" keywordseo="IDFC-Bank">IDFC Bank</keyword> today, the shares of the Chennai-headquartered <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">finance</keyword> company traded nearly 50% down on Thursday at Rs 70. 
 
With more than 20 branches, IDFC Bank will start functioning as a full-fledged bank from Thursday. The provider of financial and advisory services further stated that Rajiv Lall will be taking over as the MD &amp; CEO of IDFC Bank with effect from October 1. 
 
Parent firm IDFC FHCL will retain almost 53% stake in IDFC Bank, while the company’s shareholders will be holding 47% of the remaining stake. The shares of IDFC Bank will be listed in the first fortnight of November. 
 
Brokerage Edelweiss Securities estimated that IDFC FHL may fetch Rs 94 (holding company discount of 40%) and IDFC Bank may fetch Rs 70. “While triggers for the holding company will be limited, the next value creator will be re-rating of the banking entity," Edelweiss Securities mentioned in a note. 
 
It further specified, "Given the strong management acumen, focus on technology and service delivery, the bank starting with a clean state with most of the hit already taken and trigger in terms of stock coming out of FII restriction (foreign holding of 22.28% in bank), we expect IDFC Bank to command a multiple of 1.85 times translating to Rs 70 per share.” 
 
“We subscribe to the model that IDFC has adopted to metamorphosise into a universal bank and de-merger will lead to value creation as it embarks on its journey of creating a strong banking franchise," the brokerage mentioned. 
 Recently, IDFC also received the bank licence to access stable retail deposits and <keyword id="3082510" type="UNKNOWN" weightage="20" keywordseo="low-cost-current-and-savings-accounts">low-cost current and savings accounts</keyword> and reduce reliance on wholesale funding. 
(Image: Thinkstock)

IDFC stocks collapse 50% over demerger news

<a href="http://www.businessinsider.in/searchresult.cms?query=Reliance+Communications">Reliance Communications</a>, Sistema Shyam Teleservices and Aircel together is not only likely to have a 3G footprint that is bigger than those of <keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> and <a href="http://www.businessinsider.in/searchresult.cms?query=Idea+Cellular">Idea Cellular</a>, analysts say, but is also expected to have 4G presence in eight circles. 
 
This comes after Anil Ambani-controlled RCom and Aircel on Tuesday announced exclusive 90-day merger talks to combine their wireless businesses under a newly listed Rs 35,000 crore entity, barely a month after RCom, India's fourth-largest carrier, and the Indian unit of Russia's Sistema JSFC announced an all-stock merger. 
 
Brokerage IDFC however pointed out one problem in the setup. It said the combined wireless operations of "RCom, Sistema Shyam and <a href="http://www.businessinsider.in/searchresult.cms?query=Aircel+">Aircel </a>would have a formidable 12 per cent revenue market share, but the debt burden of both RCom (Rs 39,900 crore) and Aircel (Rs 20k-to-24k crore range) could be a possible deal breaker." 
 Meanwhile, in a note to clients, <keyword id="6361649" type="CITY" weightage="20" keywordseo="Goldman-Sachs">Goldman Sachs</keyword> said on Wednesday: "A combined entity could offer 3G services in 18 circles, launch <keyword id="6493730" type="UNKNOWN" weightage="20" keywordseo="4G-services">4G services</keyword> on the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles." 
 
The US brokerage noted that the potential combine would "breach overall spectrum caps in Tamil Nadu, West Bengal and Jammu &amp; Kashmir. Operators are not allowed to hold more than 25% of the total spectrum in a circle. People familiar with the matter said the new entity may surrender excess airwaves.” 
 
(Image credits: BCCL)

RCom, Aircel, SSTL merger likely to create strong number 4 after Airtel,Vodafone, Idea

What if Vodafone Idea dies?

Mumbai, Jan 22 () Serial entrepreneur Bhavin Turakhia on Wednesday said he is focusing on taking his newest business Zeta to the US and Europe as he looks to decrease the fintech firm's reliance on India for revenues.
 The 40-year-old billionaire said the company is not looking at any acquisitions or stake sales at present, but will be open for a strategic investor coming in like French player Sodexo.
 Turakhia said over USD 70 million has been invested in the company, including USD 40 million by him and co-founders and USD 30 million by Sodexo, for creating a product suite targeted at banks.
 "We have been building the product for four years and 
will be launching in US, which is the biggest market for fintechs, and European countries this year," Turakhia told .
 He said all his previous businesses, including Directi, have depended on overseas clients for revenues, but Zeta has been an exception, wherein it sold services to Indian banks initially, and then branched out to Brazil, the Philippines and Vietnam in its four-year journey till now.
 The UK, Italy and Spain are the markets in Europe the company is looking at, Turakhia said, adding it takes up to six months for customising a product to local compliance requirements and ensuring connectivity with local financial switches.
 The company launched the suite called 'Tachyon' on Wednesday, wherein it has integrated a host of applications and services into a single suite. 
 The company is looking at increasing its total headcount to 650 by end of March 2021, and half of the incremental talent will be hired overseas across functions, Turakhia said.
 It will continue to look at India as a key for its engineering and product development activities, but will also hire talent for this function overseas, he said.
 At present, it counts on Kotak Mahindra Bank, RBL Bank, IDFC Bank, ICICI Bank and HDFC Bank as among clients, Turakhia said, adding that it has also developed core banking softwares for which it is in a few conversations.
 Typically, a new age bank or one which is entering into a new vertical like credit cards is the one which will be looking for the core banking solution, he said, adding the company sees the ongoing mergers of state-run banks as an opportunity.
 Turakhia said the company will be "self sufficient" from a cash flow perspective and added that it does not require any external capital. It has last raised capital at a USD 300 million valuation. AA MR
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You Searched For "idfc merger" and got 9 results

RBI approves IDFC-IDFC First Bank merger

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IDFC to merge with its banking arm in all-stock deal

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IDFC First Bank posts Rs 76.36 cr net profit in March quarter

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IDFC First Bank reports Q3 net loss of Rs 1,639 cr

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IDFC First Bank to raise Rs 2,000 cr capital from promoter, Warburg Pincus, 3 others

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IDFC stocks collapse 50% over demerger news

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RCom, Aircel, SSTL merger likely to create strong number 4 after Airtel,Vodafone, Idea

BI India Bureau

What if Vodafone Idea dies?

Rounak Jain

Bhavin Turakhia looks to take fintech product to US, Europe

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