Infrastructure Development Finance Company (IDFC) said the Competition Commission of India (CCI), on Tuesday, approved its merger with IDFC FIRST Bank.
IDFC FIRST Bank offers banking services, while its parent IDFC Ltd (IDFCL) is an RBI-registered non-banking financial company.
“The CCI vide its letter dated today, i.e. October 17, 2023 has communicated that it has considered and approved the combination under Green Channel Route, pursuant to the notice jointly filed by IDFC FHCL, IDFC Limited, and IDFC FIRST Bank, in terms of Section 6(2) of the Competition Act, 2002 read with Regulations 5 and SA of the Competition Commission of India (Procedure in regard to the transactions of business relating to combinations) Regulations, 2011,” IDFC Limited said in a regulatory filing.
The boards of IDFC First Bank Ltd and IDFC Limited, in July, had approved the merger. Besides, boards of IDFC FIRST Bank and IDFC approved the reverse merger and said the composite scheme of amalgamation includes the merger of IDFC and IDFC Financial Holding Company with IDFC First Bank.
The fair trade regulator also approved the cancellation of the existing shares held by IDFC Financial Holding in IDFC FIRST Bank and the issue of new shares of the bank to IDFCL's shareholders. The share exchange ratio for the amalgamated entity will be 155 equity shares of f IDFC First Bank for every 100 equity shares of IDFC Limited.
"The share exchange ratio for the amalgamation of IDFC Limited with IDFC First Bank shall be 155 equity shares of face value of ₹10/- each fully paid-up of IDFC First Bank for every 100 equity shares of face value of ₹10/- each fully paid-up of IDFC Ltd,'' IDFC First Bank had said in a regulatory filing in July.
The deal is subject to conditions, including the merger of IDFC Financial Holding into IDFC Ltd in the first step and subsequently, the amalgamation of IDFCL with IDFC FIRST Bank.
"There are no horizontal overlaps or vertical/complementary linkages between the business activities of the parties in the country. Given the absence of any horizontal overlaps or vertical or complementary linkages between the parties, the transaction is being notified under the green channel route," CCI said.
Nonetheless, the amalgamation will come into effect only after it gets permission from the Reserve Bank of India (RBI) and the National Company Law Tribunal (NCLT) and the Securities and Exchange Board of India (SEBI).