Focus on HDFC Bank Share Price After Merger with HDFC

HDFC Bank and Housing Development Finance Corporation (HDFC) completed their merger, resulting in the creation of a new Indian banking giant valued at $172 billion. The merger became effective on July 1, and HDFC Bank shares experienced a 2% increase, reaching a new 52-week high. HDFC Bank is now the fourth-largest bank in terms of equity market capitalization in India. The bank opened at ₹1714.90 per share on the Bombay Stock Exchange (BSE) and closed at ₹1,701.75 per share on the same exchange. Analysts expect the share prices to continue rising, with potential immediate supports at ₹1,850 and ₹1,670.

The merger between HDFC Bank and HDFC Ltd. was announced on April 4, 2022, and received all necessary shareholder and regulatory clearances. As per the merger scheme, HDFC Bank will issue and allot 42 new equity shares for every 25 equity shares held by HDFC Ltd. shareholders as of the Record Date, which is July 13, 2023.

Sashi Jagdishan, CEO & MD of HDFC Bank, expressed confidence in the merger, stating that it is a defining event for the bank and will enable the creation of a holistic ecosystem of financial services. HDFC Bank has transformed into a financial services conglomerate, offering a comprehensive range of financial services beyond banking.

The merger aims to leverage the strengths of both entities, providing increased scale, a wide product offering, balance sheet resiliency, and synergies across revenue opportunities and operational efficiencies. HDFC Bank subsidiaries include HDFC Securities Ltd., HDB Financial Services Ltd., HDFC Asset Management Co. Ltd, HDFC ERGO General Insurance Co. Ltd., HDFC Capital Advisors Ltd., and HDFC Life Insurance Co. Ltd.

Following the merger, HDFC Bank has become one of the world's most valuable banks, poised for future growth and playing a significant role in nation-building and employment generation. The bank expects to grow at 18% to 20% and plans to double its branches in the next four years. It aims to enhance customer relationships and increase its deposit base by tapping into the existing customer base of HDFC Ltd. HDFC Bank enjoys high investor confidence, and its stock performance will depend on loan book growth and return on assets.