IDFC FIRST BANK AND IDFC LTD
Corporate Valuation and Mergers and Acquition
(CCE-2)
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PR E SE NT E D BY:
o M2325212- Ankit Singh
o M2325213- Anurag Singh
o M2325216- Shalini Singh
o M2325217- Surbhi Singh
o M2325218- Anushka Sinha
Crypto: investing & trading
INTRODUC TION
The merger between IDFC First Bank and IDFC Ltd., announced in 2021, aimed
to create a more integrated financial services entity. This consolidation was
designed to streamline operations, enhance capital efficiency, and expand
service offerings. By combining IDFC Ltd.'s financial expertise with IDFC First
Bank's banking capabilities, the merger sought to strengthen the capital base,
diversify product offerings, and improve market positioning in the competitive
financial landscape.
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A B O U T T H E C O M PA N Y
IDFC First Bank IDFC LTD
o IDFC First Bank is a private sector o IDFC Ltd. (Infrastructure
bank in India, established in 2015 Development Finance Company)
through the merger of IDFC Bank is an Indian financial institution
and Capital First. It focuses on established in 1997, primarily
providing a wide range of focused on infrastructure
banking services, including financing. The company provides
savings and current accounts, a range of financial services,
loans, and investment products, including project finance,
with a strong emphasis on digital investment banking, and asset
banking and financial inclusion. management.
M E RG E R P RO C E S S O F I D F C F I R S T
BANK AND IDFC LTD
Regulatory Valuation and Shareholder Final Merger
Announcement:
Approvals: Exchange Ratio: Approval: Execution:
July 2023 The merger required A valuation process Shareholders of both Upon receiving all
approvals from was conducted to entities needed to necessary approvals,
regulatory bodies, determine the share approve the merger the merger was
including the exchange ratio for proposal in meetings finalized, integrating
Reserve Bank of IDFC Ltd. convened for this the operations of
India (RBI) and other shareholders purpose. IDFC Ltd. into IDFC
financial regulators. receiving shares. First Bank.
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SYNERGIES:
1. Cost Synergies
2. Revenue Synergies
3. Enhanced Product Offerings
4. Market Positioning
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REASONS FOR MERGERS :
o Enhanced Financial Strength
Merging allowed IDFC First Bank to strengthen its capital base, providing more
resources for lending and investment in growth opportunities.
o Diversified Product Offerings
The combination of IDFC Ltd.'s infrastructure financing expertise with IDFC First Bank's
retail banking services enabled a broader range of financial products for customers.
o Operational Efficiency
Streamlining operations through the merger aimed to reduce costs and improve
efficiency, leading to better service delivery and enhanced profitability.
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REASONS FOR MERGERS:
o Market Expansion
The merger expanded the customer base by combining retail banking with infrastructure
financing, allowing access to a wider range of clients and projects.
o Focus on Financial Inclusion
Both entities aimed to promote financial inclusion by offering tailored solutions to underserved
segments, aligning with national goals.
o Regulatory Compliance and Strategic Fit
The merger was aligned with regulatory expectations for financial institutions and positioned
IDFC First Bank as a stronger player in a competitive market.
9 F I N ANCIAL S TAT EMENT
PRE (PROFIT AND LOSS)
IDFC First Bank IDFC LTD
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PRE CASH FLOWS
IDFC First Bank IDFC Ltd
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POST MERGER
PROFIT AND LOSS
IDFC First Bank IDFC Ltd
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S WA P R AT I O
(155:100)
Relative valuation Simplifying Structure Shareholder Value Regulatory and
Strategic Alliance
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CONCLUSION:
The merger between IDFC First Bank and IDFC Ltd. simplifies the
corporate structure by consolidating IDFC Ltd. (a holding company)
into IDFC First Bank (the operational entity). The share exchange
ratio of 155:100 reflects the relative values of the two entities. This
merger enhances operational efficiency, strengthens governance,
and unlocks value for shareholders by creating a single, streamlined
banking entity.
T H A N K YO U
