HDFC Twins Among Top Losers On Sensex Post Merger Announcement: 10 Points
- Housing Development Finance Corporation (HDFC) and HDFC Bank which had led the stock market's rally on Monday (April 4), declined on profit booking today.
- HDFC Bank slipped 1.94 per cent to Rs 1,576.05. HDFC fell 1.83 per cent to Rs 2,573.95 on Wednesday. Both these stocks had gained nearly 10 per cent on April 4.
- On Monday, HDFC Chairman Deepak Parekh had announced the entity's merger with HDFC Bank, creating a banking behemoth with a market capitalisation of Rs 14 lakh crore.
- After the merger, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC Ltd will own 41 per cent of HDFC Bank.
- Shareholders of HDFC Ltd will receive 42 shares of HDFC Bank (face value of Re 1 each) for 25 shares of HDFC Ltd of Rs 2 each — a ratio of 1:1.68.
- Following the merger announcement, HDFC Bank shares had shot up by 9.97 per cent to Rs 1,656.45 on the BSE Monday. HDFC Ltd shares had risen by 9.30 per cent to close at 2,678.90.
- The combined market capitalisation will enable HDFC Bank to overtake TCS and become number two in valuation after Reliance Industries Ltd (Rs 18.01 lakh crore).
- “The merger is a coming together of equals,” Mr Parekh had said, adding that it is like “after 45 years and 9 million home loans, we have found a home for ourselves”.
- HDFC Ltd is India's largest housing finance company with total assets under management of Rs 5.26 lakh crore and a market cap of Rs 4.85 lakh crore.
- HDFC Bank is India's largest private sector bank by assets with a market cap of Rs 9.17 lakh crore.
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