IDFC, IDFC First Bank shares jump up to 2% on NCLT nod for merger

The majority shareholders of IDFC First Bank has approved the amalgamation of IDFC with the bank on May 17, 2024.

IDFC Bank was given a licence by the RBI along with Bandhan Bank in 2014. In 2018, IDFC Bank and Capital First announced the completion of the merger to become IDFC First Bank.

IDFC First Bank shares surged XX percent in trade on September 26 after the the National Company Law Tribunal (NCLT) in Chennai has approved the merger of IDFC Financial Holding with IDFC, and the subsequent merger of IDFC into IDFC First Bank.

“We would like to inform you that the Hon’ble NCLT has sanctioned the scheme. The company is in the process of applying for availing certified true copy of the NCLT order and completion of requisite statutory/ regulatory formalities, in order to make the scheme effective,” said IDFC First Bank in a filing with the exchanges.

At 9.15am, shares of IDFC First Bank were quoting Rs 74 in trade on the NSE, higher by 1.3 percent. IDFC‘s stock jumped 1.8 percent to Rs 111.85 per share.

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The majority shareholders of IDFC First Bank approved the amalgamation of IDFC with the bank at a meeting convened by the Chennai bench of the National Company Law Tribunal on May 17, 2024.

On December 27, 2023, IDFC said the Reserve Bank of India has given its no objection certificate (NOC) for the amalgamation of IDFC, IDFC FHCL, and IDFC First Bank. In July 2023, the IDFC board of directors approved the proposed for amalgamations.

IDFC Bank was given a licence by the RBI along with Bandhan Bank in 2014. In 2018, IDFC Bank and Capital First announced the completion of the merger to become IDFC First Bank.

IDFC, through its non-financial holding company, holds a 39.93 percent stake in IDFC First Bank. After the merger, the book value per share of the bank will increase by 4.9 percent, as calculated on audited financials as of March 31, 2023.

Over the past year, shares of IDFC have fallen 13 percent in trade, while IDFC First Bank’s stock has tumbled 23 percent during the same time period.

In July 2023, the boards of IDFC Financial Holdings Co, IDFC, and IDFC First Bank approved the merger.

Under the reverse merger plan, IDFC shareholders will receive 155 shares for every 100 shares they hold in the bank.

IDFC and IDFC First Bank shares both have a face value of Rs 10 each. In 2014, the RBI granted IDFC Bank its licence. In 2018, IDFC Bank and Capital First completed their merger to form IDFC First Bank.

Shares of IDFC and IDFC First Bank fell for the second consecutive trading session on Wednesday, with IDFC closing 0.9% down at Rs 109.87 and IDFC FIRST Bank ending 0.9% lower at Rs 73.02 on National Stock Exchange. That compared with 0.25% gains in the country’s benchmark NSE Nifty 50.