HDFC Bank-HDFC merger news makes shareholders richer by over ₹1 lakh crore

• The merger of HDFC Bank and HDFC has brought in the much-needed cheer for investors of the HDFC group.
• Shares of the HDFC group companies were hovering closer to their 52-week lows prior to the merger announcement.
• However, now, HDFC Bank and HDFC’s shares are closer to their respective 52-week highs.

News of the merger of HDFC Bank and HDFC has not only created India’s largest financial behemoth, it has also made shareholders of the HDFC group companies richer by over ₹1 lakh crore.

There’s delight all around for the shareholders of HDFC group companies – for the past year or so, the share price of these companies had underperformed the overall index. However, that changed in a snap, with the news of the merger sending the share prices rallying by as much as 15%, adding over ₹1 lakh crore to the shareholders’ kitty.


HDFC Bank returned the biggest returns, contributing ₹2 out of every ₹3 invested in the four companies. HDFC came in at the second position, contributing ₹1 for each ₹3 invested in the four companies.

The gains trickled down to HDFC Life and HDFC AMC as well, although the change wasn’t major.


Source: NSE, current market cap based as at 12:30 p.m. on April 4

Interestingly enough, despite today’s massive boost to HDFC and HDFC Bank, all the four group companies are still significantly lower than their 52-week highs.


Source: NSE, price as of 12:50 p.m. on April 4

HDFC Life and HDFC AMC are a lot closer to their 52-week lows than highs. It remains to be seen if investor enthusiasm on the merger news is temporary or here to stay, and if it trickles down to HDFC Life and HDFC AMC as well.

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