FTSE indices are expected to rename HDFC as HDFC Bank and maintain its current free float shares in the indexes after the merger. MSCI will continue with the half factor for the combined entity, resulting in passive trackers having to sell around $150-200 million. FTSE may also include HDFC Bank shares in its index if there is sufficient liquidity and no foreign ownership restrictions. Despite the merger being the largest in India s corporate history, the impact is expected to be minimal due to the size of the merged entity.
With the merger likely effective July 1, the new HDFC Bank entity will have around 120 million customers that’s greater than the population of Germany.
Last week, CCI had approved the proposed combination involving the acquisition by Housing Development Finance Corporation Ltd (HDFC) of certain additional shareholding of HDFC ERGO General Insurance Company Ltd (HDFC ERGO).