IDFC on Monday informed the exchanges that IDFC Financial Holding Company Limited, a wholly owned subsidiary of IDFC Limited, has submitted a letter to IDFC First Bank with respect to unlocking value for shareholders of IDFC Ltd. Here is the full text of the aforesaid letter.
Unlocking Value for IDFC Ltd. shareholders:
Dear Mr. Chaudhary,
As you are aware, IDFC Limited (IDFC) is the promoter of IDFC FIRST Bank and is currently holding through its wholly owned subsidiary, IDFC Financial Holding Company Limited (FHCL) ~ 36.50 per cent equity in IDFC FIRST Bank. Under the 2013 guidelines of RBI, IDFC, as a promoter, was required to hold a minimum 40 per cent share-holding for a period of 5 years from commencement date of operations of the bank. This five-year lock-in period ended on September 30, 2020. RBI vide their letter dated July 20, 2021 has clarified that after the expiry of the lock-in period of 5 years IDFC Limited can exit as the promoter of IDFC FIRST Bank. A copy of this letter is attached herewith. (Annexure – I)
FHCL is a non-operational financial holding company and IDFC is registered as a NBFC with RBI and both have no business operations. Besides holding this investment in IDFC First Bank, IDFC FHCL also holds ~100 per cent in the IDFC Asset Management Company Limited (IDFC AMC). IDFC Ltd.’s Board of Directors at its meeting held on September 17, 2021 had approved the sale of IDFC AMC and is taking necessary steps to complete the same. I am also attaching the current corporate structure of the group. (Annexure – II)
At a group level, we have two listed entities, IDFC Ltd. as well as IDFC First Bank. After the sale of IDFC AMC, IDFC Ltd. will hold its investment in IDFC First Bank and the post-tax cash realized on sale of IDFC AMC. In addition, the IDFC Ltd group corporate structure currently includes the IDFC Foundation and two underlying Joint Ventures with the Delhi Govt and Karnataka Govt respectively. Actions for the suitable disposition of these entities are in process.
The Board members of IDFC Ltd. and NOFHC are considering next steps and look forward to remaining in touch with IDFC First Bank. It would help us in our deliberations if IDFC First Bank were to provide us with their views.
We are looking forward to an early response.
IDFC Financial Holding Company Limited
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