Last week, IDFC First Bank said the proposed merger would boost the bank's standalone book value by 4.9% compared with its financials as of March 31. It also said it aims to increase its balance sheet by 20% to 25% per year in the near to medium term.
"The merger will lead to simplification of the corporate structure of IDFC FHCL, IDFC Limited and IDFC FIRST Bank by consolidating them into a single entity and will help streamline the regulatory compliances of the aforesaid entities," the release added. Vaidyanathan noted the bank has key "strategic goals" and since the "Indian market is so large and wide and we're still a tiny player, we think that we can grow at a good rate for a long time to come with a holding like this."
Still, the deal is subject to approvals from India's key regulatory authorities, including the Reserve Bank of India, Securities and Exchange Board of India and India's stock exchanges.the recent merger will not dent IDFC First Bank's prospects for inclusion in the MSCI standard index for August. Inclusion in the index "would be a big deal," said Vaidyanathan. "Whether we make it now or later in our mind, we have no doubt. We are very confident and frankly, it'd be an honor to be part of MSCI index for us," added the CEO.
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