Everything you need to know about the merger of HDFC Ltd. with HDFC Bank

Trading Announcements
1

The board of HDFC Ltd. and HDFC Bank on June 30, 2023, approved the merger of HDFC Ltd. into HDFC Bank. The record date to determine the shareholders of HDFC Ltd. to whom shares or HDFC Bank will be allotted has been set as July 13, 2023. You can check the announcement here.

As a result of this, the shares of HDFC Ltd. will be suspended from trading on the stock exchanges from July 13, 2023 onwards and the shares will not reflect in your holdings on Kite. As per the scheme of arrangement, shareholders of HDFC Ltd. will receive 42 shares of HDFC Bank for every 25 shares held of HDFC Ltd.

Any fractional entitlement will be cash-settled and the amount will be credited to the primary bank account.

When will I receive shares of HDFC Bank?

Generally, the credit of shares can take between 30 - 45 days from the record date. This can happen sooner too in the case of HDFC Bank as it is part of Nifty 50. You’ll receive an email from CDSL once the shares are credited to the demat account.

When will the allotted shares start trading on the exchanges?

After the credit of shares, the company has to take approval from the exchanges to list the shares. Post the approvals are received the shares will start trading on the exchanges.

What will be the average price for allotted shares of HDFC Bank?

The average price of allotted HDFC Bank shares will be calculated as follows: Invested value in HDFC Ltd. / The number of HDFC Bank shares received including fractional shares.

For example, if you had invested in 25 shares of HDFC Ltd. at a price of Rs. 2500, the invested value will be Rs. 62,500.

If you receive 42 shares of HDFC Bank, the average price will be Rs. 1488.09 (62,500 / 42).

The fractional shares are cash settled, and the amount for these will be directly credited to your primary bank account as and when the trustee appointed by the company sells the shares.

When will I receive the amount for fractional entitlement?

If there is any fractional entitlement, the equivalent amount will be directly credited to your primary bank account after the trustee appointed by the company sells the shares.

What if I hold less than 25 shares of HDFC Ltd.?

Even if you hold less than 25 shares of HDFC Ltd., you will receive an allotment of HDFC Bank shares.

For example, if you hold 10 shares of HDFC Ltd., your allotment comes at 16.8 shares (42 / 25 = 1.68 x 10 = 16.8).

16 shares will be credited to your demat account. 0.8 will be fractional and the amount for this will be credited to your primary bank account.

What happens to the F&O contracts of HDFC Ltd?

The existing F&O contracts of expiry months July 2023, August 2023, and September 2023 will expire on July 12, 2023, and shall be physically settled.

No futures and options contracts of HDFC will be available for trading with effect from July 13, 2023. You can check the exchange circular here.

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2

So what should I do if I have,say, 5 shares of HDFC . Should I sell them before 13 OR should I wait for allottmet of partial shares and receiving cash settlement amount?

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If you hold 5 shares, you are eligible to receive 8.4 shares (42 / 25 = 1.68 x 5 = 8.4). 8 shares will be credited to your demat account. 0.4 will be fractional and the amount for this will be credited to your primary bank account.

4

Will the date of acquisition for the purpose of calculating capital gains remain unchanged as the date of acquisition of the original HDFC shares or will it be changed to the date that the HDFC Bank shares get credited?

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5

just curious, what if one person holds 10 shares in one demat and 15 shares in another demat. so basically same person, same PAN card, just 2 different demat/dp. in that case also, would it be cash settlement?

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Original date of purchase will be considered as date of acquisition and Capital gains liability will not be triggered by the event of merger. It arises only when one exits their investment.

7

I have 1 share then what should i do

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Hi, the calculation is done demat-wise and only the fractional shares will be cash settled.

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You’re entitled to receive 1.68 shares (42 / 25 = 1.68 * 1 = 1.68). 1 share will be credited to your demat account, while for remaining 0.68, the amount will be credited to your primary bank account.

3 Likes
10

I have one share of hdfc ltd purchase value is 1765/- and current LTP is 2795.60

As per the calculations i will get 1.68 share
So if i calculate the value according to current LTP
2795.60/1.68 = 1664.28/-

Whereas the current LTP of HDFC bank 1674/-

And will it be merging with existing HDFC banks share holdings and share the price of HDFC bank will be recalculated according to new holdings

In above case shall we go for sell ? Please suggest your thoughts

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11

please guide if HDFC shares in my Pledge and fno position open on basis of that pledge benefit , what action will be taken by zerodha

  1. will Zerodha sq off my fno position
  2. is any Margin shortfall as per Exchange
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12

The shares adjustments will be done per demat and not per PAN card.

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  1. If you have pledged HDFC Limited then it will be automatically unpledged from Zerodha on 12th EOD.

  2. If you have any FNO position in HDFC and if you don’t maintain sufficient fund then it will be squared off from Zerodha

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14

@ShubhS9 is this zerodha official reply ?

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Yes. The above mentioned points are correct.

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Yes, @kul.mathur.

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17

I have some shares of HDFC which is pledge for fno trading. After merger with HDFC Bank, we’ll get shares of HDFC Bank. I would like to know that whether new allotted shares of HDFC Bank will be automatically pledge for trading or not ?

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18

What happens to indices? Will their calculation and valuation change because of this merger?
If not then 75% of banknifty will be HDFC and ICICI Banks?

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19

At what price they will give the encashment for the 0.8 share?

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20

The fractional shares are consolidated and alloted to the trustee appointed by the company. Who then sells this shares in the market at the prevailing market price, after which the amount will be credited to you depending on your fractional entitlement.