India's largest private sector bank is now bigger than the likes of Lockheed Martin, HSBC or BlackRock

India's largest private sector bank is now bigger than the likes of Lockheed Martin, HSBC or BlackRock
  • HDFC Bank’s share price dipped by nearly 1% within hours of it making a new record for itself and crossing ₹8 lakh crore in valuation on November 25.
  • This makes India’s largest private sector lender bigger than the likes of BlackRock Lockheed Martin and HSBC on the US stock market.
  • HDFC Bank’s stock had already hit a fresh 52-week high on November 24, when the CLSA raised its target price.
HDFC Bank crossed a new milestone as its market capitalisation hit ₹8 lakh crore ($108 billion) when the Indian exchanges opened on November 25, strengthening in place as India’s third most valuable company.

Globally, this makes India’s largest private sector bank bigger than US behemoths like Lockheed Martin, HSBC and BlackRock.

CompanyMarket valuation
HDFC Bank$108 billion
BlackRock$106.65 billion
Lockheed Martin$105.89 billion
Source: BSE, NYSE as per today’s USD/INR conversion rate

However, the euphoria was short-lived. By afternoon trade, the stock dipped by over 1% to ₹1424.75. This has brought its valuation back down to just under the ₹8 trillion mark at ₹7.92 trillion.

Nonetheless, HDFC Bank is the first lender and the third Indian company — aside from Tata Consultancy Services (TCS) and Reliance Industries — to have hit this mark.

Top companies by market capitalisation:
CompanyMarket cap
Reliance Industries₹13.29 lakh crore
Tata Consultancy Services (TCS)₹10.21 lakh crore
HDFC Bank₹7.9 lakh crore
Source: BSE

Today’s surge comes after India’s latest private sector lender had already hit a fresh 52-week high yesterday. This after brokerage CLSA raised the target price of the lender to ₹1,700 this week.

In addition, there was already an air of optimism around private sector banking stocks as the Reserve Bank of India (RBI) proposed new guidelines for ownership, including the possibility of increasing promoters’ stake from the current 15% to 26%.

HDFC Bank has been one of the best performers over the last three months
So far this year the stock has surged by nearly 14% despite the impact of the COVID-19 pandemic. The last three months, in particular, have been one of the best performing for the bank. HDFC Bank is among the seven financial companies among the top 10 gainers on the NIFTY50 since September.

During the second quarter, the bank’s revenues were up by 15% as compared to last year at ₹21,868.8 crore. Its profits also increased by 18.4% year-on-year (YoY) to ₹7,513.1 crore.

HDFC Bank has also been cautious in its commentary with the Supreme Court’s stay on declaring accounts as bad loans until the hearing on the RBI’s moratorium is complete.

The bank’s management has said that there haven’t been any requests for restructuring granted as of October. However, they also highlighted that borrowers have until December to file their applications leaving room for the situation to change if warranted.

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