Starting next month, the last lap of approvals for the merger of Capital First with private sector lender IDFC Bank will be initiated, and the merged entity is likely to start taking shape from October.

Shareholders of IDFC Bank are set to meet on September 3 to vote on the proposed merger.

Meanwhile, equity shareholders and secured creditors of Capital First and its wholly-owned subsidiaries Capital First Home Finance and Capital First Securities, will meet on October 4 to approve the amalgamation, Capital First said in a recent regulatory filing.

“It is expected that the merged entity is likely to start taking shape by the end of October, but the actual operations is unlikely before the end of the year,” said an expert, adding that the merged entity is expected to start functioning fully from the fourth quarter of the fiscal.

“It is only in the January to March quarter of this fiscal that some concrete plans and strategy of the merged entity is likely to be seen,” said the expert.

Restructuring plan

Once the shareholders approve the merger, a restructuring plan is also likely to be worked out for the merged entity.

According to market sources, the retail sector is likely to be the key focus of the new entity, given the vast distribution network of branches and banking correspondents that would be available.

IDFC Bank and Capital First had, on January 13 this year, announced a plan to merge, subject to regulatory approval. In June, IDFC Bank had said it has received the ‘No Objection’ from the Reserve Bank of India for the merger of Capital First and its wholly-owned subsidiaries with the bank.

After merger, Rajiv Lall, Managing Director and CEO of IDFC Bank, will take over as the Non-Executive Chairman of the new entity. V Vaidyanthan, Chairman and Managing Director, Capital First, who is also a veteran banker, will become the MD and CEO of the new entity.

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