No more time to MFs for realigning portfolios in HDFC twins

Mumbai The market regulator Sebi does not see any need for giving more time to mutual fund houses with large holdings in the merger-bound HDFC twins, to realign their portfolios post-merger since there's no material data and given the highly liquid nature of these stocks demanding such an extension.

In the biggest merger in the history of India Inc, HDFC in April 2022 said it would merge with its own banking subsidiary in a $40-billion all-stock deal -- after 46 years of being a home loan financier and in between creating the country's largest private sector bank and four other financial sector brands in the insurance, AMC and brokerage businesses.

And this Tuesday (June 27), HDFC chairman Deepak Parekh said the boards of the Corporation and HDFC Bank will meet on June 30 to finalise the last contours of the merger which is expected to be effective July 1.

He has also said that would be the last meeting of HDFC board and also his as the chairman after working in the company from day one of its inception in October 1978. After a marathon board meeting, Sebi chairperson Madhabi Puri Buch told reporters late last night at her headquarters that “available data do not demand that mutual funds should be given more time to realign their portfolios after the merger of the HDFC twins.

“There is no material evidence to suggest that the merger and the resultant increase in their holdings in the much larger HDFC Bank needs any special attention since only a few schemes will have marginally larger than the permissible 10 per cent holding,” she said, adding “and none of them will have more than 12 per cent holdings in the merged bank.”