IDFC First Bank, IDFC merger: Will it influence Nifty Bank stocks?

The record date for merger of IDFC First Bank and IDFC Ltd is October 10 and, therefore, NSE Indices will be making the necessary adjustments today during the last 30 minutes of trading.
With this, IDFC First Bank's weight in the Nifty Bank index is expected to increase, while other constituents will experience a slight decrease in their respective weights, Nuvama Institutional Equities said in a note.

That said, the impact on passive flows will be insignificant. IDFC First Bank is seen attracting $39 million in passive inflows following the corporate action. HDFC Bank Ltd is expected to see $11 million outflows, followed by ICICI Bank ($10 million), State Bank of India ($4 million), Kotak Mahindra Bank ($4 million) and Axis Bank ($4 million). IndusInd Bank, Bank of Baroda, Federal Bank, AU SFB and Canara Bank are also expected to see $1-2 million outflows.

As per the scheme of amalgamation, IDFC Financial Holding Company was to merger into and with IDFC Ltd and the latter into and with IDFC First Bank. 
  
Tuesday, October 01, 2024, was the effective date on which the certified order of NCLT sanctioning the scheme was filed by IDFC FHCL, IDFC Limited and IDFC FIRST Bank with the Registrar of Companies (“ROC”).

The share exchange ratio for the amalgamation of IDFC into and with IDFC First Bank is 155 equity shares of face value of Rs 10 each of IDFC First Bank for every 100 fully paid-up equity shares of face value of Rs 10 each of IDFC, as on record date, i.e. October 10.

The record date was arrived in consultation with IDFC First Bank, for determining the shareholders of IDFC, who would be issued and allotted the shares of IDFC First Bank under the scheme.