HDFC-HDFC Bank Merger: Mortgage lender Housing Development Finance Corporation (HDFC) on April 4 said its board has approved merger of its wholly owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited.
HDFC will acquire 41 percent stake in HDFC Bank through the merger, according to an HDFC Bank filing with the stock exchanges. The merger of HDFC into HDFC Bank is likely to create the third-largest entity in India in terms of market capitalisation. HDFC said that its shareholders will get 42 shares of HDFC Bank for every 25 shares of the non-banking lender held by them.
Also Read: Banking Central | Why did HDFC decide to merge with HDFC Bank now?
“This is a merger of equals. Over the last few years, various regulations for banks and NBFCs have been harmonised, thereby enabling the potential merger,” Deepak Parekh, chairman of HDFC said in a press statement.
Analysts suggested that the merger will create the biggest stock in terms of weight in the Nifty50 index, easily surpassing Reliance Industries’ current weight of 11.9 percent. As of March 31, HDFC Bank's weight on the index was 8.4 percent while that of HDFC was 5.66 percent.
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HDFC Bank and HDFC: Then and now - a timeline
HDFC Bank was among the first to receive approval from the Reserve Bank of India (RBI) to set up a private sector bank in 1994.... Read More
HDFC-HDFC Bank Merger LIVE |
Top management of HDFC and HDFC Bankas well as industry experts feel the mega-merger is a win-win for the two organisations, stakeholders, customers and even the economy. However,HDFC’sdepositors and borrowers are bound to have certain doubts regarding the future of their long-term contracts.Here's an explainer on what it means for the depositors and buyers.
HDFC-HDFC Bank Merger LIVE |
In FY96, HDFC Bank's net profit was Rs 20 crore and in FY21 it went up to Rs 31,856 crore. Similarly, HDFC's net profit in FY96 was Rs 196 crore and in FY21 stood at Rs 13,566 crore. Here's a timeline of how both the entities have developed over the years.
HDFC-HDFC Bank Merger LIVE| Mega-merger will quicken HDFC Bank’s growth: Marcellus’ Saurabh Mukherjea
Saurabh Mukherjea, founder, Marcellus Investment Managers, reacting on what the HDFC-HDFC Bank merger means going forward, said that if one looks at HDFC Bank’s progress in the last three years, the lender’s has been an impressive performance with robust growth in market share and margin improvement, and expects the growth story to go still further. About his outlook when it comes to the bank’s fundamentals, Mukherjea told CNBC-TV18, “I have always said in the last three years that HDFC Bank has been stellar in the way it gained market share. If you add up the gains of the entire private sector banking space and compare that with gains made by HDFC Bank in the last three years, you find HDFC Bank has made significant gains.” Read More
HDFC-HDFC Bank Merger LIVE| Here's what HDFC's top officials said on the mega-merger
HDFC-HDFC Bank Merger LIVE| 'Zero leak of information': HDFC-HDFC Bank merger sparks internet frenzy
The HDFC-HDFC Bank merger is expected to be completed by the second or third quarter of of FY24. HDFC said the Proposed Transaction shall enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base. The merger surprised many as the news was kept under wraps and Twitter had a lot to say. “In my 36 years of investing journey, never seen HDFC Ltd rise by 15% and HDFC Bank by 14% in one single session and that too on the same day. phew!” a banker tweeted. “This merger has been discussed among investors for many years. The timing of it is a real surprise. There was zero leak shows the corporate governance of the HDFC group,” another user tweeted. Read More
HDFC-HDFC Bank Merger LIVE| Key highlights of the mega-merger
HDFC-HDFC Bank Merger LIVE| Didn't see value on combined basis 6-7 years ago: HDFC MD & CEO Sasidharan Jagdishan
Acknowledge that 6-7 years ago we did not see the value on a combined basis. The fastest-growing engine for bank is micro-segment which qualifies for the priority sector, said HDFC MD & CEO, Sashidhar Jagdishan. The interest rate regime has come down and there is no more a drag on reserve requirements, he added.
HDFC-HDFC Bank Merger: Mega-merger to enable value unlocking for HDFC Bank in house loan portfolio: Experts
“The mega-merger between HDFC Ltd into the HDFC bank will enable value unlocking for HDFC bank to build a solid housing loan portfolio and play the housing cycle by enhancing the existing customer base. The merged entity could become the highest weightage single company in the Nifty 50 basket. Further, this merger enables confidence in the Indian economy and looks for a brighter long-term picture beyond the ongoing Russia-Ukraine conflict and the rising inflationary concerns,'' saidNaveen Kulkarni, Chief Investment Officer, Axis Securities.
HDFC-HDFC Bank Merger LIVE| HDFC twins merger may not free up enough FPI headroom for stock's inclusion in MSCI indices
The party on Dalal Street triggered by the announcement of the merger of HDFC with HDFC Bank could be short-lived given the potential of no entry for HDFC Bank in the MSCI index after the transaction. In an exchange filing on April 4, HDFC announced that it will be merging into HDFC Bank to create one of the largest financial institutions in the country with a likely combined market capitalisation of more than Rs 12.5 lakh crore as of Friday’s closing. The announcement saw shares of both HDFC and HDFC Bank soar over 15 percent at one point before losing a third of those gains at the time of writing. The profit booking seen in HDFC Bank’s stock was likely triggered by a realisation that even after the merger the lender’s stock may not become part of the MSCI indices, which are tracked widely by foreign exchange-traded funds. Read More
HDFC-HDFC Bank Merger LIVE| Why did HDFC decide to merge with HDFC Bank now?
HDFC-HDFC Bank merger has been in the news for a while. In fact, back in 2015, HDFC Chairman Deepak Parekh had said his firm could consider a merger with HDFC Bank provided circumstances are in favour. But, the wait for the merger got longer with the parent putting the idea on the backburner saying the regulatory environment is not conducive. Parekh had said that the merger makes sense provided there is no loss of value for shareholders and considering the business synergy between two institutions. But, there is a question on the timing of the merger; why did they choose to do it now? One key reason could be the emerging regulatory approach of the banking regulator to NBFCs. The benefit of continuing as an NBFC is nearly absent now compared with the older times. Read More
HDFC-HDFC Bank Merger LIVE| HDFC twins joining up is a merger of equals but beware the regulatory costs
India’s largest housing finance company HDFC will merge into subsidiary HDFC Bank which is the country’s most valuable private sector bank through an amalgamation scheme, the stock exchanges were informed today. On the face of it, the merger is indeed of equals and is a win-win in terms of balance sheet heft, cost synergies and market share. It will also open up space for foreign institutional investors to buy HDFC Bank shares. That said, there are key regulatory costs here that both the companies will need to carefully assess. The most critical of these are cash reserve ratio, statutory liquidity ratio and priority sector lending norms. Read More
HDFC-HDFC Bank Merger LIVE| Merger process to take about 12-18 months because of numerous approvals: Deepak Parekh
This process will take 12-18 months because of numerous approval, said Deepakh Parekh in the press conference. The RBI doesn’t allow over 75 year old officials to be on the Board, I have crossed that age, added Parekh. Keki will have a year or year-and-a-half so he has time and he can be a director on Board, whatever Shashi wants him to do. Keki Mistry does not wish to be a full time executive but can be on the Board, said Parekh.
HDFC-HDFC Bank Merger LIVE| After 45 years, we have found home in our own company, says Deepak Parekh
HDFC Chairman Deepak Parekh, while addressing the press conference said that after providing nine million homes, they require a home and that they have found a home in their own family company.
HDFC-HDFC Bank Merger LIVE| Post closing of deal, HDFC Bank will be 100% owned by public shareholders
After the closing of the merger, HDFC Bank will be 100 percent owned by public shareholders, said Deepak Parekh, Chairman, HDFC shareholders of HDFC Ltd will own 41 percent stake in HDFC Bank post the merger. Post the effective date of merger, all HDFC branches and offices will continue to offer mortgage.
HDFC-HDFC Bank Merger LIVE| Post-merger, all subsidiaries of HDFC to be owned by HDFC Bank: Deepak Parekh
Post-merger, all the subsidiaries of HDFC will be owned by HDFC Bank, subject to regulatory approval, said Deepak Parekh in a press conference today. He added that they have approached Reserve Bank of India (RBI) for a phased-in approach regarding SLR, CRR, PSL.
HDFC-HDFC Bank Merger LIVE| Merger will mitigate single product risk, enhance diversity of assets of combined entity: Deepak Parekh
The HDFC-HDFC Bank merger will mitigate single product risk, enhance diversity of assets of combined entity. The combined entity will be in a position to offer mortgage products seamlessly vs current assignment route, said Deepak Parekh in press conference today.
HDFC-HDFC Bank Merger LIVE| Regulatory changes over past 3 years reduced barriers for merger: Deepak Parekh
Regulatory changes over the past three years have reduced barriers for merger, said HDFC Chairman Deepak Parekh. The merger makes the mortgage offering of the combined entity even more competitive, he added. The funding challenge will be minimised with the merger of the two entities.
HDFC-HDFC Bank Merger LIVE| See potential for 7% more room for international investors, post merger: Keki Mistry
See potential for seven percent more room for international investors, post the transaction, said HDFC CEO, Keki Mistry. There can be 7-8 percent increase in foreign holding in combined entity post-merger, he added.
HDFC-HDFC Bank Merger LIVE| HDFC-HDFC Bank merger is subject to shareholder, regulator approvals: Keki Mistry
Merger of HDFC and HDFC Bank is subject to shareholder & regulator approvals, said HDFC CEO, Keki Mistry. Shareholders of HDFC will get 42 shares of HDFC Bank for 25 shares of HDFC.
HDFC-HDFC Bank Merger LIVE| Cost of borrowing for HDFC will come down: Former SBI Chairman Rajnish Kumar
The advantage of the merger was that the cost of borrowing for HDFC Ltd will come down, former SBI chairman Rajnish Kumar has said in a CNBC TV18 interview. "When the cost comes down the combined entity gains in terms of cost efficiencies and it is value accretive for both the shareholders of HDFC and HDFC Bank,” he said. Both the firms announced in a notice to exchanges that the merger would be through a share swap and once the deal is effective, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of the bank. Read More
HDFC-HDFC Bank Merger LIVE| HDFC - HDFC Bank merger to create third-largest company in India
The merger of HDFC into HDFC Bank is likely to create the third-largest entity in India in terms of market capitalisation. HDFC said that its shareholders will get 42 shares of HDFC Bank for every 25 shares of the non-banking lender held by them. Read More
HDFC-HDFC Bank Merger LIVE| HDFC will acquire 41 percent stake in HDFC Bank through transformational merger
Mortgage lender HDFC will acquire 41 percent stake in HDFC Bank through the transformational merger, according to an HDFC Bank filing with the stock exchanges on April 4.
HDFC-HDFC Bank Merger LIVE|
Good morning and welcome to Moneycontrol's LIVE coverage of the HDFC-HDFC Bank Merger today on April 4, 2022.Stay tuned for the latest news, developments, and analysis!
