On September 25, 2024, IDFC Ltd announced that it has received approval from the National Company Law Tribunal (NCLT) in Chennai for the merger of IDFC Financial Holding Company with IDFC, along with their subsequent merger into IDFC First Bank. This decision marks a significant step in the company’s restructuring process.
NCLT Approval
In a regulatory filing, IDFC Ltd stated:
“We would like to inform you that the Hon’ble NCLT has today, i.e., on September 25, 2024, sanctioned the aforesaid scheme.”
The company is currently working on obtaining a certified true copy of the NCLT order and is completing the necessary statutory and regulatory formalities to implement the scheme.
Background of the Merger
This approval follows the company’s letter dated July 3, 2023, where IDFC Ltd informed stakeholders about the board of directors’ decision regarding the merger. The company had previously filed a Joint Company Scheme Application with the NCLT Chennai Bench to seek sanction for the merger and other related orders under Sections 230-232 of the Companies Act.
Shareholder Approval
Earlier in May 2024, IDFC First Bank shareholders had given their approval for the merger of IDFC Ltd with IDFC First Bank. An exchange filing from IDFC First Bank indicated that the resolution to approve the merger was passed by a substantial majority of equity shareholders, with over three-fourths of them voting in favor.
Support from Non-Convertible Debenture Holders
The amalgamation scheme also garnered overwhelming support from Non-Convertible Debenture (NCD) holders. A remarkable 99.99% of the NCD holders voted in favor of the merger, with more than three-fourths of the value represented through remote e-voting and during the meeting.
Multiple-Choice Questions (MCQs):
- What date did IDFC Ltd receive approval from the NCLT for its merger?
- A) September 24, 2024
- B) September 25, 2024
- C) July 3, 2023
- D) May 2024
Answer: B) September 25, 2024
- What is the purpose of the merger involving IDFC Ltd?
- A) To expand its international operations
- B) To merge IDFC Financial Holding Company with IDFC and subsequently with IDFC First Bank
- C) To acquire a new subsidiary
- D) To enhance its corporate governance
Answer: B) To merge IDFC Financial Holding Company with IDFC and subsequently with IDFC First Bank
- What percentage of IDFC First Bank shareholders voted in favor of the merger?
- A) 50%
- B) 75%
- C) Over three-fourths
- D) 99%
Answer: C) Over three-fourths
- How much support did the Non-Convertible Debenture holders show for the amalgamation scheme?
- A) 75%
- B) 99.99%
- C) 85%
- D) 100%
Answer: B) 99.99%
- Under which sections of the Companies Act was the Joint Company Scheme Application filed?
- A) Sections 210-220
- B) Sections 230-232
- C) Sections 300-310
- D) Sections 400-410
Answer: B) Sections 230-232