Why HDFC Bank turned down MUFJ's overtures on HDB Financial

livemint.com:

NBFC). Some HDFC Bank board members were keen on the deal, but after much debate, the board took a collective call to not risk missing the listing deadline, the people cited above said on condition of anonymity. HDBFS is mandated to go public by September 2025, as per guidelines of banking regulator Reserve Bank of India (RBI).

The people added that getting a new investor would take about four-five months from now, and another couple of months would be needed to file the IPO papers of HDBFS with Sebi. The approval process would also take another few months, pushing the IPO to August-September 2025. “Nobody can predict how the market conditions would be by the time the IPO was approved, and there would be no choice but to go ahead to avoid missing the deadline," said the first person cited above.

“The IPO documents are now expected to be filed in the next three months," the second person said. HDFC Bank’s board had given an in-principle nod to start HDBFS’s listing process on 20 July. Further, HDFC Bank’s board also appears to be reluctant to have another company as a co-promoter.

The people cited above said MUFG did not want a small stake, which would have meant sharing the promoter tag with it, an outcome the board wanted to avoid. “People realised that having a co-promoter alongside HDFC Bank might not have much of an advantage at this stage. If the bank needs a strategic investor later, it will think about it then," said the second person.