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HDFC receives Sebi approval to change in control of HDFC AMC

The change in control of the asset management company is part of HDFC's merger deal with HDFC Bank.Premium
The change in control of the asset management company is part of HDFC's merger deal with HDFC Bank.

  • The change in control of HDFC AMC is due to the change in co-sponsor of HDFC Mutual Fund on account of the proposed composite scheme for the merger of HDFC Investments and HDFC Holdings, wholly-owned subsidiaries of HDFC with and into the company. Further, HDFC will be merged into HDFC Bank.

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Market regulator Sebi has granted its approval to NBFC-giant for change in control of its subsidiary HDFC AMC. HDFC received the approval on August 4. It has already received no-objection/approval from stock exchanges and RBI. The transaction is now subject to NCLT approval. The change in control of the asset management company is part of HDFC's merger deal with HDFC Bank.

Sebi's approval for change in control of HDFC AMC is due to the change in co-sponsor of HDFC Mutual Fund on account of the proposed composite Scheme of amalgamation for the merger of HDFC Investments and HDFC Holdings, wholly-owned subsidiaries of HDFC with and into the company. Further, HDFC will be merged into HDFC Bank.

In its regulatory filing, HDFC said, "we wish to inform you that SEBI on August 4, 2022, has granted its in-principle approval for change in control of HDFC Asset Management Company Limited, a subsidiary of HDFC Limited, and the asset management company of HDFC Mutual Fund, subject to the approval of the National Company Law Tribunal ("NCLT") under Sections 230-232 of the Companies Act."

"The Scheme remains subject to various statutory and regulatory approvals inter alia including approvals from the Competition Commission of India, the NCLT, and the respective shareholders and creditors of the companies involved in the Scheme as may be required," HDFC said.

On BSE, HDFC shares closed at 2,353.75 apiece down by 6.65 or 0.28%. The company's market cap is around 4,27,079.97 crore.

On April 4, HDFC and HDFC Bank board approved a composite scheme for the amalgamation of HDFC Investments and HDFC Holdings into HDFC and later HDFC with and into HDFC Bank.

The combined entity will bring together complementary strengths of the two organizations, enabling a rewarding customer relationship.

Post the combination, HDFC Bank’s customers will be offered mortgages as a core product in a seamless manner. HDFC Bank will also leverage the long tenor mortgage relationship to offer varied credit and deposit products enabled through better insights throughout the customer life-cycle. This will result in an enhanced value proposition and customer experience for all customers of the combined entity.

The board of HDFC and HDFC Bank believes that the merger will create long-term value for all stakeholders, including customers, employees, and shareholders of both entities. The amalgamation of the two entities will provide further impetus to the Government’s vision of “Housing for All"

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