HDFC Bank, Centurion boards approve 1:29 share swap ratio

Shareholders of Centurion Bank of Punjab would be eligible to exchange 29 shares into one share of HDFC Bank. This follows the board of directors of the two banks approving on Monday a share-swap ratio of 1:29. HDFC Bank’s share closed at Rs 1,422.70, down by 3.5 per cent while Centurion Bank ended the day at Rs 48.25, lower by 14.45 per cent on the BSE on Monday. The entire process of the merger would take about four months for completion. The merged entity will be known as HDFC Bank. Mr Rana Talwar, Chairman of Centurion Bank, has been offered a seat on the Board as non-executive director and Mr Shailendra Bhandari, Managing Director, Centurion Bank, has been invited to join as the Executive Director on the board post merger. “The near-term impact on HDFC’s financials would be moderately negative considering the relatively poor financials of Centurion Bank. It would take HDFC Bank a while to leverage the branch network of Centurion Bank to improve its financials, said Mr Vaibhav Agrawal, Senior Analyst-Banking, Angel Broking Ltd. The draft scheme of amalgamation, the due diligence report and any other matters as required will be considered by the board of HDFC Bank at its meeting scheduled on February 28.