HDFC and HDFC Bank announce merger of India’s largest housing finance company with the largest private bank
Business Insider India
- HDFC and HDFC Bank today announced a merger, bringing the housing finance company under the wings of HDFC Bank.
- While HDFC is the largest housing finance company in India, HDFC Bank is the largest private bank.
- Both the companies envision significant gains from the merger, allowing them to better cross-sell their products, with the power of HDFC Bank’s strong distribution network driving growth.
AdvertisementHDFC and HDFC Bank have announced a transformational merger today. With this, HDFC will merge into HDFC Bank and the public shareholders of HDFC Bank will become 100% shareholders of HDFC.
While the shares of HDFC were up by 15%, HDFC Bank’s shares were up by nearly 14% as of 10:15 a.m., on April 4.
According to the announcement, existing shareholders of HDFC will get shares in HDFC Bank – every 25 shares held in HDFC will fetch 42 shares in HDFC Bank. This is beneficial for HDFC shareholders according to the closing price on April 1.
With the merger, the two companies hope to leverage each other's strengths – HDFC’s domain experience in housing finance with HDFC Bank’s superior scale and distribution. This will allow the merged entity to cross-sell both banking and housing finance products even better.
How HDFC and HDFC Bank stack up
While HDFC is the largest player when it comes to housing finance, HDFC Bank is the largest private-sector bank in the country.
|Annualised profit after tax||₹13,388 crore||₹35,875 crore|
|Net worth||₹1,15,400 crore||₹2,29,640 crore|
|Advances||₹5,25,806 crore||₹12,68,863 crore|
Source: Company reports, annualised as of December 31, 2021
The company says it could take up to 18 months to receive the necessary regulatory approvals for the merger.
$HDFC.NSE $HDFCBANK.NSE A potential behemoth in the making. For the longest time Puri wanted HDFC Bank to be independent of HDFC and no prizes for guessing, the bank today does 80% more PAT than HDFC. Based on the merger calculations, there was a 9% arbitrage in the morning which got merged on pre-open. As of now, investors in both the counters should do well, although the Bank will be the behemoth. Let's not forget - both HDB Financial Services and HDFC Securities sit inside HDFC Bank.— (@mehrotra_saket) April 04, 2022
“The proposed transaction ticks all the right boxes in terms of completion of product offerings, product leadership in home loans as with other retail assets products, distribution strength across the country and a customer base that can be leveraged to cross-sell a complete suite of financial products,” said HDFC Bank’s chief executive officer, Sashi Jagdishan.
AdvertisementKeki M Mistry, the chief executive officer of HDFC, said, “With the leadership that we have built in housing finance and the deep understanding of the housing market across various economic cycles, this transaction helps in realising the potential of what HDFC’s housing finance business can achieve by leveraging the distribution and customer base of HDFC Bank.”
Things you need to keep in mind while investing in US stocks
Reliance Jio lost over 9 million subscribers in January, but that is a good thing – here’s why
Four charts to show how India’s digital payments ecosystem has evolved in the last one year
Popular on BI
- A top AI researcher reportedly left Google for OpenAI after sharing concerns the company was training Bard on ChatGPT data
- An AI researcher who has been warning about the technology for over 20 years says we should 'shut it all down,' and issue an 'indefinite and worldwide' ban
- What is an indictment? What it means for someone to be indicted by a grand jury and why Trump was charged
- Amul hikes milk price by ₹2/ltr in Gujarat
- GST mop-up rises 13% to ₹1.6 lakh crore in March, second highest collection ever
- White House refuses to pay for Twitter's Blue verification: Report
- Italy bans ChatGPT, orders investigation over privacy breach
- IISc researchers design tiny supercapacitor capable of storing large amount of electric charge