Here's the full text of the letter:

Dear Shareholders,

When I wrote to you last year, we had just commenced our journey of working towards the merger of HDFC and HDFC Bank. Financial year 2023 marked a year of many happenings.We have been working relentlessly on the merger, whilst continuing to focus on ‘business as usual in a global macro-economic environment that has been exceptionally volatile

The optimism on India continues with renewed vigour. The country has demonstrated resilience with its broad-based recovery. India’s position has been further strengthened with cyclical and structural tailwinds.

The country’s GDP growth rate is likely to be more than double that of global growth. We are extremely confident that the runway for housing finance in India will remain immense for several years to come.

During the year, we have made substantial progress on the merger. Personally, if I were to summarise the year in one word, it would be ‘gratitude’.
When we announced the merger, we knew we had hard deadlines to meet and a maze of complex transactions to navigate through. Being one of the world’s largest merger announcements in recent times, each milestone has been closely followed by all stakeholders. We have been unwavering in our commitment to being transparent throughout this process and have engaged deeply with our stakeholders to keep them abreast of the progress of the merger.

Working on a merger of this scale has been challenging and rewarding. Encountering hurdles is par for the course in such transactions. Yet, what amazed us the most has been the immense goodwill and strong relationships that HDFC as a group has. Whenever and wherever we reached out for guidance, doors opened and help was at hand instantly. We have worked with possibly the country’s best legal teams, chartered accountants, valuers, bankers, advisors, and other specialised professionals. The collective knowledge and experience of all these parties is unparalleled.

The approvals by the Competition Commission of India, the National Company Law Tribunal, the shareholders, and the regulators were important merger milestones. In all our dealings pertaining to the merger, the HDFC group has been treated in a fair and just manner. We stand committed to adhering to the prerequisites as stipulated by the regulators, respecting the fact that these decisions are made keeping in mind the best interests of the Indian financial ecosystem.

As we approach the tail end of the merger process, the effectiveness of the preparatory work undertaken will be tested. For over ten months, the Integration Committee has been labouring on ensuring a seamless transition. This is a painstaking exercise given the many moving parts of this complex merger. Cross-functional teams are hard at work to ensure that the execution plan and strategic objectives are upheld in the merged entity.

Working towards the common goal of executing the merger has helped both sides get to know each other better. It has been a phase of working jointly to tackle issues on hand, but more importantly, it has enabled HDFC Bank to have a deeper understanding of the underlying dynamics of the home loan business.

Over the course of the year, both HDFC and HDFC Bank have gone to great lengths to explain the rationale of the merger, which has been well received by our stakeholders. An oft-repeated question is what happens to the culture of HDFC? My answer to this is that mergers are inherently about change. The work culture will be an amalgamation of the best of both organisations. Culture at the workplace is always a shared responsibility. It needs daily reinforcement through the demonstration effect with the tone set at the top. What remains steadfast is the underlying ethics and value systems of both entities.

The confidence I derive is the agreed tenet of this integration --preservingthe fabric of the ‘HDFC way of working'. This has also been publicly articulated by the leadership at HDFC Bank.

No institution in India has the richness of 46 years of understanding the needs of a home loan customer. Home loans are always different from other financial products. It is the single largest investment a person makes in his or her lifetime. Home loans as a financial product evokes a strong emotional quotient.

No doubt, the housing finance industry is a competitive one today. Yet, HDFC will always have the distinction of being the institution that introduced retail housing finance to the country. Over the years, we have, in no small measure, helped chart the course for housing finance to be recognised as an integral part of development of the country.

‘HDFC home loans’ is an invaluable intangible. Since its inception, HDFC has been committed to building a customer-centric organisation. We pride ourselves on our deep expertise in understanding real estate markets at the micro level, the relationships we have nurtured with developers and our ability to provide value-added services such as legal and technical appraisals in-house.

Our experience has taught us that every home loan customer has their own story and it is the empathy factor that is the key differentiator between housing finance providers. Dealing with home loan customers requires immense patience. It is about understanding the needs and feelings of a home loan customer, assuaging their anxiety during this complex transaction, customising solutions, explaining financial implications of a mortgage product and lending responsibly to ensure a customer is not over stretched.
Home loans will now be complemented by HDFC Bank’s core strengths -- its sales engine, execution capabilities at scale and deep insights into consumer behaviour.

For HDFC Bank, a home loan customer marks the beginning of a journey of having a customer in perpetuity. HDFC Bank is excited at the prospect of cross-selling an array of asset and liability products to home loan customers. This will be done seamlessly on their digitalisation platforms – all through a one-click experience.

HDFC Bank’s vast distribution network will be better harnessed for both home loans and the group companies. As a natural progression, the synergies between HDFC Bank and the group companies will deepen with HDFC Bank taking on the mantle of ownership.

What the future holds, only time will tell. The biggest risk organisations face today is staying with the status quo, believing what worked well yesterday will continue in the future. Change takes courage as it displaces one from the cocoon of comfort and familiarity. Yet, with change comes the power of adaptability, growth and new aspirations. The orchestration of this merger is to ensure that the future is not constrained for any of our stakeholders.
As HDFC hands the baton, my wish is that our core founding values of kindness, fairness, efficiency and effectiveness gets woven deeper into the fabric of the HDFC group.

To all our employees transitioning to HDFC Bank, know that you will always carry the indelible mark of ‘HDFC’ with you. This is your era of new possibilities. Embrace change, continue to work as close-knit teams, be kind and have each other’s back. The future is yours to grasp.

Our senior management and leadership team over the years have been the torchbearers and crusaders, ensuring that our core values percolate down to every level within the organisation. More importantly, to all our employees, past and present, I personally salute each and all of you who built the foundation, the walls and then the floors brick by brick with solid mortar. Some have been true HDFC lifers, others have dispersed, but none will be forgotten. They are the fulcrum upon which this institution has stood on.
Governance has been the cornerstone of HDFC and for that, I am grateful to all our directors who have supported and guided us through the decades.
To all our shareholders, thank you for your trust and belief in us. HDFC’s new home is about strategising and building for the long term.

I deeply acknowledge the pivotal role and contribution of the Chairman of HDFC Bank, Mr. Atanu Chakraborty along with the other board members during this merger process.

With the proven execution capabilities of HDFC Bank, we are confident that Sashi, together with the leadership team will forge an era of new opportunities for the combined entity.

It is my time to hang my boots with both anticipation and hope for the future. While this will be my last communication to shareholders of HDFC, rest assured we now stride tall into a very exciting future of growth and prosperity.
The HDFC experience is invaluable. Our history cannot be erased and our legacy will be taken forward.

Deepak Parekh

HDFC Chairman

HDFC chairman Deepak Parekh announces retirement ahead of merger