Limaye added that the effective date of the de-merger will essentially have to be the date when the bank starts its operations.
The board approved a proposal to demerge its financing undertaking into its wholly owned step down subsidiary IDFC Bank, pursuant to a scheme of arrangement under Sections 391-394 of the Companies Act 1956, IDFC said. The process of de merger will take 6-9 months as it would require regulatory approvals from both the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) as well as from the court.
Through the de merger, a non-operating financial holding company (NOFHC) will be created under which the bank will be held, thus complying with the RBI bank licence guidelines. The central bank has mandated the structure of an NOFHC for setting up a bank. The NOFHC will be a 100% subsidiary of IDFC. The NOFHC will hold 53% stake in the bank while existing IDFC shareholders will hold the remaining 47%, said Limaye.
The bank will be listed on the day on which it starts operations, said Limaye. IDFC bank will be listed on both Bombay Stock Exchange and the National Stock Exchange and for every share of IDFC, the shareholder will get one equity share of the bank.
To comply with the RBI guidelines, the infrastructure finance major has also raised R1000 crore through shares and brought down the foreign shareholding to below 50%. IDFC had registered a standalone net profit of R470.15 crore for the quarter ended September 30, down by 5.61% y-o-y. The net interest income was down by 6 % y-o-y to R648 crore. On the other hand, the non interest income increased to R449 crore from R198 crore a year ago.
The company's gross non-performing assets stood at R342.38 crore which is 0.62% of total advances.The current environment is very challenging as there are no new projects. Corporate growth has been minimum and as we finance infrastructure projects, said Limaye.