IDFC : Board of Directors Approve Merger with IDFC First Bank Limited

• The Board of Directors of IDFC Limited and IDFC Financial Holding Company Limited approved merger with IDFC FIRST Bank Limited and a share exchange ratio of 155 shares of IDFC FIRST Bank for every 100 shares held in IDFC.
• The merger will create value for IDFC Limited's shareholders and provide direct shareholding in IDFC FIRST Bank Limited.

Mumbai, July 3, 2023: IDFC Limited ("IDFC"), announced a merger with IDFC FIRST Bank Limited (("Bank") and the share exchange ratio for the proposed merger.

The Board of Directors ("the Board") of IDFC Limited ("IDFC") and IDFC Financial Holding Company Limited ("IDFC FHCL") approved composite Scheme of Amalgamation of IDFC FHCL and IDFC Limited with IDFC FIRST Bank Limited in their respective board meetings held on July 3, 2023.

Commenting on this development, Anil Singhvi, Chairman of IDFC Limited, said: "Today marks an important day in our journey towards creating value for our stakeholders. As IDFC looks to conclude the last phase of its corporate restructuring, the merger with IDFC First Bank will help create a financial services powerhouse enabling seamless delivery of services to our customers. It will augment operational efficiency for the merged entity and create synergies for our shareholders."

As per the share exchange ratio under the scheme of amalgamation, the Bank will issue and allot to the eligible shareholders of IDFC, 155 new equity shares of the face value of 10 each (cancelling the shareholding of IDFC held through IDFC FHCL in the Bank in its entirety), credited as fully paid-up, for every 100 equity shares of the face value of Rs. 10 each fully paid-up held by such shareholder on completion of the proposed merger. The share exchange ratio will result in a premium of about 20% on the closing market price of the shares of IDFC vis-à-vis IDFC FIRST Bank Limited on June 30, 2023. Also, IDFC paid special dividend of Rs.11/- per share in February 2023 to the to the Shareholders of the Company.

History and current status of the proposed merger: IDFC was granted in-principle approval by the Reserve Bank of India to set up a bank in April 2014, leading to the creation of IDFC Bank Limited and IDFC Financial Holding Company Limited. All the regulated businesses were transferred to the IDFC FHCL as per applicable law following this approval. IDFC Bank further strengthened its business following the merger with the Capital First Ltd in December 2018 and was subsequently renamed IDFC FIRST Bank Limited. As a promoter, IDFC was required to hold a minimum of 40% equity in the Bank for five years (till September 30, 2020).

Post " in principle approval " to merge IDFC/ IDFC FHCL with the Bank(granted in December 2021) the Board of IDFC is working untiringly to get the best value of it's asset & noteworthy was the sale of AMC business to Bandhan Group. It is with utmost satisfaction that with the merger, IDFC has created huge value for it's shareholders, the market capitalisation has gone up from Rs. 8,000 Crores to Rs. 17,000 Crores.

The merger is subject to approvals from the stock exchanges, Reserve Bank of India, Competition Commission of India, and shareholders. In addition, the scheme of amalgamation will be subject to approval by the NCLT, Chennai bench.

Advisors

SSPA & Co., Chartered Accountants (Registered Valuer) were appointed as valuers by IDFC Limited and IDFC Financial Holding Company Limited. Axis Capital Limited, SEBI Registered Merchant Banker provided fairness opinion.

Cyril Amarchand Mangaldas acted as legal advisors to IDFC Limited and IDFC Financial Holding Company Limited.