The board of directors of HDFC Property Ventures Limited (“HPVL”), HDFC Venture Capital Limited (“HVCL”), both wholly owned subsidiaries of Housing Development Finance Corporation Limited (“Corporation”) and HDFC Capital Advisors Limited (“HCAL”), another subsidiary of the Corporation, at their respective meetings held today i.e. on August 25, 2022 have approved a scheme of amalgamation (“Scheme”) for the proposed amalgamation of HPVL and, HVCL with HCAL, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, subject to receipt of requisite approvals (“Proposed Amalgamation”).
The combined platform shall advise/ manage approximately USD 4.1 billion of assets and this makes it one of the leading private equity firms in India.
The Scheme inter alia envisages amalgamation of HPVL and HVCL (together, “Transferor Companies”) with and into HCAL (“Transferee Company”) and the dissolution of the Transferor Companies without being wound up.
HDFC Property Ventures Limited (“HPVL”) Total revenue/ turnover (including other income) of HPVL, during the previous 3 of HPVL financial years are given below:
FY 2021-22 – Rs. 35,01,95,337
FY 2020-21 – Rs. 37,10,56,690
FY 2019-20 – Rs. 36,86,11,566
HDFC Venture Capital Limited (“HVCL”) Total revenue/ turnover (including other income) of HVCL during the previous 3 financial years are given below:
FY 2021-22 – Rs. 1,01,592
FY 2020-21 – Rs. 5,472
FY 2019-20 – NIL
HDFC Capital Advisors Limited (“HCAL”) Total revenue/ turnover (including other income) of HCAL during the previous 3 financial years are given below:
FY 2021-22 – Rs. 86,95,98,328
FY 2020-21 – Rs. 66,81,53,733
FY 2019-20 – Rs. 61,54,62,391
HPVL and HVCL are wholly-owned subsidiaries of the Corporation. HCAL is a subsidiary of the Corporation.The Proposed Amalgamation is on an arm’s length basis. The share exchange ratio has been determined based on valuation report issued by an independent valuer.
HPVL provides investment advisory services. HVCL is an investment manager to a venture capital fund registered with SEBI. HCAL is an investment manager to SEBI registered AIFs
The Proposed Amalgamation will:
- result in simplification, streamlining and optimization of the group structure and efficient administration.
- result in enhancement of shareholder value accruing from consolidation of business operations resulting in economies of scales, reduction in overheads including administrative, managerial and other expenditure, operational rationalization, organizational efficiency and optimal utilization of resources.
- result in synergy of operations will be achieved, resulting in optimisation of the common facilities such as manpower, office space, etc. Other infrastructure could also be better utilized and duplication of facilities could be avoided resulting in optimum use of facilities.
- result in a significant reduction in the multiplicity of legal and regulatory compliances required at present to be carried out by HPVL, HVCL and HCAL.
- result in greater efficiency in cash management and unfettered access to cash flow generated by the combined business, which can be deployed more efficiently, to maximize shareholder value.
Pursuant to the proposed amalgamation of HPVL with and into HCAL, the shareholders of HPVL will be issued 1,374 shares of Rs. 10 each of HCAL and Pursuant to the proposed amalgamation of HVCL with and into HCAL, the shareholders of HVCL will be issued 638 shares of Rs. 10 each of HCAL.
Upon the Scheme becoming effective, HCAL will issue equity shares (as mentioned above) to the shareholders of HPVL and HVCL as on the record date. There would be no change in the shareholding pattern of the Corporation on account of the above transaction.