The country’s largest private lender HDFC Bank and home financing giant HDFC will combine on July 1^st, 2023. The merger will be cleared and approved at a meeting of the boards of HDFC and the private bank on June 30 following.  The largest corporate transaction in Indian history, the $40 billion acquisition between HDFC Bank and the largest domestic mortgage lender on April 4 of last year resulted in the creation of a financial services behemoth. The aggregate asset base of the proposed business will be close to Rs 18 lakh crore.

Keki Mistry, vice-chairman, and CEO of HDFC, stated that the company’s shares will be delisted starting on July 13. Once the agreement is in place, existing HDFC shareholders will own 41% of the bank, making public shareholders the sole owners of HDFC Bank. For every 25 HDFC shares a shareholder has, they will receive 42 HDFC Bank shares.

On April 4^th, 2022, a merger agreement was reached that is thought to be the largest business deal in India’s corporate history. The merged company is anticipated to have assets of around Rs 18 lakh crore. After the merger takes effect, existing HDFC shareholders would own 41% of the bank, making public shareholders the sole owners of HDFC Bank. The price of HDFC stock increased by 1.59%, closing at Rs 2,762.50 a share on the BSE. It gained 2.26 percent throughout the day and reached a high of Rs 2,781. In the meantime, shares of HDFC Bank rose by 1.38 percent to close at Rs 1,658 per share, following an earlier advance of 2.23 percent to Rs 1,672.

The merged entity’s capital sufficiency, asset quality, and profitability will all increase as a result of the merger. As the combination will include integration problems, regulatory clearances, operational concerns, and market uncertainty, the share prices of both HDFC Bank and HDFC Ltd may see some volatility in the near future. In the meantime, shares of HDFC Bank rose by 1.38 percent to close at Rs 1,658 per share, following an earlier advance of 2.23 percent to Rs 1,672.

Long-term benefits from the merger are anticipated for the share prices of HDFC Bank and HDFC Ltd since the new company will have a larger balance sheet, customer base, product portfolio, and distribution network. The ownership patterns, profits per share, and book value per share of both firms will all be impacted by the merger.

While this is happening, analysts who follow India’s largest lender are shifting from bearish to bullish as the merger’s completion removes a significant overhang and attention turns to the lender’s capacity to profit from expansion in a favorable credit climate for the industry. According to statistics gathered by Bloomberg, buy recommendations for HDFC Bank currently account for 98% of all calls on the stock, which is the highest percentage since October 2000. Comparing the institution to significant competitors like ICICI Bank Ltd, State Bank of India Ltd, and Axis Bank Ltd, it has had the most improvement in analyst opinion this year.