HDFC Bank Limited (NSEI:HDFCBANK) agreed to acquire 4.99% stake in HDFC ERGO General Insurance Company Limited from Housing Development Finance Corporation Limited (BSE:500010) for INR 19.1 billion on June 18, 2021. Under the terms, HDFC Bank acquires 3,55,67,724 equity shares of HDFC ERGO from Housing Development Finance Corporation at INR 536 per share in cash. For the financial year ended on March 31, 2021, the total turnover of HDFC ERGO was INR 124.4 billion and the net-worth as at that date was INR 29.3 billion.

The transaction is subject to receipt of necessary approvals including from Insurance Regulatory and Development Authority of India, Reserve Bank of India and the shareholders of Housing Development Finance Corporation and HDFC Bank. The Board of Housing Development Finance Corporation Limited and HDFC Bank approved this transaction. As of October 26, 2021 Competition Commission of India (CCI) approves acquisition by HDFC Bank Limited.

The transaction is expected to be completed by September 30, 2021. Ashwath Rau and Kashish Bhatia of AZB & Partners acted as legal advisors to Housing Development Finance Corporation Limited.