The boards of HDFC Bank and HDFC on Friday gave their approval to the merger, effective 1 July. The record date would be 13 July.

Prior to this development, HDFC chairman Deepak Parekh announced his retirement from the company.

The merger of parent HDFC with HDFC Bank will create the world’s fourth largest bank by market capitalisation. 

The appointed date for the merger of HDFC Investments and HDFC Holdings Ltd into HDFC is 30 June.

The boards also decided that July 13 will be the record date for determining shareholders of the corporation who will be allotted shares of HDFC Bank.

As per the share swap arrangement, HDFC shareholders will get 42 shares of the private sector lender for every 25 shares held.

Ahead of the merger announcement, the mortgage lender said it has acquired an additional 0.5097% stake in HDFC Ergo to make it a subsidiary.

HDFC said in a regulatory filing that it acquired 36.4 lakh equity shares of the general insurer representing 0.5097% of its total issued and paid-up share capital from ERGO International AG, the other promoter.

“Post the said acquisition, HDFC Ltd holds 50.50% of the total paid-up share capital of HDFC Ergo. Accordingly, HDFC Ergo has become a subsidiary of HDFC Limited,” it said.

In his final letter to shareholders, Parekh said: “While this will be my last communication to shareholders of HDFC, rest assured we now stride tall into a very exciting future of growth and prosperity. The HDFC experience is invaluable. Our history cannot be erased, and our legacy will be taken forward.” 

Speaking about the completion of the merger, Sashi Jagdishan, CEO & MD of HDFC Bank, said, “This is a defining event in our journey, and I am confident that our combined strength will enable us to create a holistic ecosystem of financial services. We’re truly happy to welcome the talented team of HDFC into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence. As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry.”

After the merger, all employees of HDFC will become HDFC Bank employees. “Over the past months, the bank has been preparing for the smooth integration not only of systems and processes but also of all aspects that will make HDFC Bank a welcoming place of work for the employees from,” the company said in a notification.

Post-merger, the key HDFC Bank subsidiaries will include HDFC, HDB Financial Services, HDFC Asset Management, HDFC ERGO General Insurance, HDFC Capital Advisor and HDFC Life Insurance.