Mumbai (Maharashtra): Housing Development Finance Corporation (DGFC) on Monday announced that its board has approved a transformational merger of its wholly woned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited.

Following the transformational merger, HDFC will own 41 per cent stake in HDFC Bank, according to and HDFC Bank filing with the stock exchanges.

As part of the deal, shareholders of HDFC Limited will receive 42 shares of HDFC Bank (face value of Rs 1 each) for 25 shares of HDFC Limited (face value of Rs 2 each).

The proposed merger is expected to be completed by second or third quarter of the Financial Year 2024.

HDFC said the proposed transaction would enable HDFC Bank to facilitate a larger quantum of credit into the priority sector including agriculture, while also offering a faster origination, improved operational efficiency, and reduced default rates.

Meanwhile, shares of HDFC and HDFC rallied 13.57 per cent to Rs 2783.60 at 10 am, while HDFC Bank traded 9.74 per cent higher at Rs 1654.20.

The 30 stock S&P BSE Sensex surged 1202.71 points or 2.03 per cent to 60,479.40 points at 10 am.