HDFC twins merger: Coming together of equals, says Deepak Parekh

Deepak Parekh, chairman of the HDFC Group, on Monday said the company has found a new home in the HDFC Group family to be part of the banking entity and the merger with HDFC Bank is coming together of equals.

"After 45 years of housing finance, we have to find a home for ourselves. And we have found a home in our own family company HDFC Bank," he said. 

"The merger is coming together of equals," said Parekh, who is the non-executive chairman of HDFC Ltd. His uncle HT Parekh had set up the mortgage company in 1977 after working for three decades.

In terms of leadership, there is a big leap from HT Parekh to Deepak Parekh to now the new generation of leaders. Parekh said that he is already 77 years old. The Reserve Bank of India's (RBI's) current guidelines does not allow any professional beyond 75 years to be on the board of the bank, including non-executive chairman.

For MD and CEO, the RBI has a maximum age limit of 70 years.  Keki Mistry, who is the vice chairman and CEO of HDFC Ltd, is already 67 years old. The merger will anyway take 16-18 months to complete. "Keki has a year-and-a-half to be the director on the board. Keki doesn't want to be full time executive," said Parekh.

The 56-year-old Sashidhar Jagdishan, the MD and CEO of the standalone bank, will steer ahead the new merged entity. In fact, Jagdishan has more than a decade to be at the helm of affair of the bank as per the RBI guidelines.

"We (referring to himself and Keki) all (will) be taken care of. We don't think that  we will be thrown out. It's a friendly merger. It's not a hostile merger. It's a merger of equals," said Parekh. In fact, there will be no employees' rationalisation.

While welcoming the media, Parekh, who has sewed many mergers in his career, said that he was a little disappointed with press intelligence. "No member of the press could decipher this. You are always one day ahead. Tomorrow's news you are supposed to give today. I was disappointed. You failed this time."

HDFC Group under Parekh's guidance tried its best to keep everything about the merger under wraps. "The work was going on for last three weeks. We tried our best to keep the number of people limited," said Parekh. Both the entities have been evaluating the pros and cons of the merger for a long time.

Post merger, HDFC Bank will be wholly owned by the public. "There will be no promoter left of the bank," said Parekh. HDFC Ltd holds 21 per cent in the banking entity, while it itself has no promoter.

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