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IDFC First Bank’s Amalgamation Scheme Receives Overwhelming Approval from NCLT


IDFC First Bank’s Amalgamation Scheme Receives Overwhelming Approval from NCLT


In a significant development for the banking sector, the Hon’ble National Company Law Tribunal (NCLT) has given its resounding assent to the composite scheme of amalgamation proposed for IDFC FIRST Bank. The pivotal meeting convened on May 17, 2024, witnessed robust discussions via video conferencing and other audio-visual means, culminating in the approval of the scheme.

The focal points of the meeting included the merger of IDFC Financial Holding Company Limited into IDFC Limited, and subsequently, the amalgamation of IDFC Limited into IDFC FIRST Bank. These strategic maneuvers, executed under Sections 230 to 232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, herald a new era for the banking landscape.

The Scheme of Amalgamation garnered an overwhelmingly positive response, with an astounding 99.99% of Non-Convertible Debenture (NCD) Holders, representing a substantial majority in value, casting their votes in favor. This resounding mandate underscores the confidence and trust placed in the amalgamation’s potential to unlock synergies and enhance shareholder value.

Simultaneously, IDFC FIRST Bank received a vote of confidence from leading rating agency ICRA Ltd (ICRA), which assigned an ICRA AA+/Stable rating to its Rs 3,000-crore TIER-II bonds under Basel-III. Additionally, the agency reaffirmed the ICRA AA+/Stable rating for the bank’s existing Long-Term instruments, affirming its robust fundamentals and prudent financial management.

Furthermore, the bank’s deposit base crossed an impressive milestone of Rs. 2.01 lakh crore in FY2024, underscored by a resilient foundation of retail deposits. ICRA’s decision to withdraw the rating outstanding on matured non-convertible debentures (NCDs) amounting to Rs 3,815 crore reflects the bank’s proactive approach towards optimizing its capital structure and enhancing investor confidence.

The amalgamation paves the way for IDFC FIRST Bank to fortify its position as a formidable player in the banking sector, poised to deliver enhanced value to its stakeholders while driving sustainable growth in the ever-evolving financial landscape.

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