“The housing loan market is at the cusp of a strong up-cycle along with tailwinds for the real estate sector, and it provides a steady secured asset class with very attractive risk-adjusted returns. Earlier NBFC’S used to enjoy regulatory arbitrage vis-à-vis banks, but the regulatory authorities have harmonized the same, thus making this merger necessary and creating a competitive advantage over its peers,” mentioned Santosh Meena, Head of Research, Swastika Investmart Ltd. the biggest gain will be access to well-diversified low-cost funding and a huge customer base of HDFC Bank Ltd. “The proposed transaction will enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base. Existing shareholders of HDFC will get shares in HDFC Bank – every 25 shares held in HDFC will fetch 42 shares in HDFC Bank,” he added. Shareholders will also have an advantage as the share prices will increase and the companies will be more profitable. “We have seen a positive impact on the stock prices and we believe that it will help both companies to increase their profitability as they would be able to use each other’s strength to their advantage.
This will improve the amalgamated entity’s ability to cross-sell banking and housing finance products,” mentioned Animesh Malviya, Banking Analyst, CapitalBy way of Global Research. The two firms intend to combine their capabilities with the merger, combining HDFC’s domain competence in housing finance with HDFC Bank’s better scale and distribution. With this, HDFC will merge into HDFC Bank and the shareholders of HDFC Bank will become 100% shareholders of HDFC. “HDFC and HDFC Bank merger will be beneficial for both the companies. Investors are better off buying at levels closer to 1480-1500 for better returns.” HDFC and HDFC Bank merger can be helpful for each firms Technically, a close today above 1600 could lead to 1720 in the coming days. This merger should bring about positive synergies, further consolidate leadership position in different segments including housing loans & credit cards, a strong re-rating & focus on internet banking augurs well for HDFC stock to begin its uptrend sooner than later. Pavitraa Shetty, Co-founder & Trainer, Tips2Trades mentioned, “Despite strong fundamentals & consistent financial performances since the pandemic, HDFC group stocks haven’t gone up much making them all the more attractive. Post merger, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC Limited will own 41% of HDFC Bank with combined balance sheet of Rs 17.87 trillion and Rs 3.3 trillion networth enabling larger underwriting at scale,” Tapse added.
Shareholders of HDFC, as on record date, will receive 42 shares of HDFC Bank (FV Re 1/- each) for 25 shares of HDFC Limited (FV Rs. We remain positive on both the stocks and other group entities as post merger there would be some structural changes in the cross holding of other group companies.
Share price of bank nifty full#
“The combined entity will leverage the power of distribution in urban, semi-urban and rural geographies and cross-sell with a full suite of financial products to a large and growing customer base. HDFC Bank was quoting at Rs 1,713.70, up Rs 13.77 per cent, and HDFC was quoting at Rs 2,818.55, up 15 per cent on the BSE. This merger will create biggest financial services conglomerate to compete globally,” mentioned Prasanth Tapse, Vice president (Research) Mehta Equities. “This merger is the biggest surprise move to markets and is a win-win call for all stakeholders. The share trade ratio for the amalgamation of HDFC with HDFC Bank shall be 42 shares (credited as totally paid up) of HDFC Bank for each 25 totally paid up fairness shares of HDFC, it mentioned. HDFC Bank share price rose 13 per cent on announcement of a transformational merger with HDFC Ltd.
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