While regulatory approvals for the merger of Housing Development Finance Corporation (HDFC) and HDFC Bank are awaited, HDFC chairman Deepak Parekh on Tuesday said the support and trust of shareholders are needed “more than ever before”.
“My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support,” Parekh said in a letter to the shareholders of HDFC during its 45th Annual General Meeting.
Stressing that trust is the foundation of a successful merger, financial and human capital, along with a proper communication strategy, are critical, he said.
“Fortunately, between HDFC and HDFC Bank, there is a natural affinity…It remains our every endeavour to be available and accessible to all our stakeholders to assuage concerns in an open and transparent manner,” Parekh said.
The proposed merger is awaiting regulatory approval at this stage. Other than the Reserve Bank of India (RBI), the merger will have to be approved by the Securities and Exchange Board of India, the National Housing Board, the Competition Commission of India (CCI), the Insurance Regulatory and Development Authority of India (Irdai), the Pension Fund Regulatory and Development Authority (PFRDA) and the National Company Law Tribunal (NCLT).
“We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level,” Parekh said.
The merger will increase the lending capacity of the group and is also expected to lower costs.
“We have, at length, already articulated the rationale for the proposed merger, which takes cognisance of the future growth potential of the country, the evolving macro environment and changes in the regulatory architecture,” he said.