On Monday, two companies of HDFC Bank, HDFC Bank and HDFC Ltd, announced the merger. This merger is considered to be the biggest merger of India’s financial sector so far. According to the information given by the market regulator on behalf of HDFC Bank, the process of merger of both the companies will be completed in the next 18 months.
What is the merger plan?: HDFC Limited is the country’s largest home loan disbursing company, with assets under management of about Rs 5.26 lakh crore while the market capitalization of the company is around Rs 4.44 lakh crore. It will be merged with HDFC Bank, the country’s largest private sector bank. Simultaneously, all the subsidiaries of HDFC Limited will also be transferred to HDFC. The market capitalization of HDFC is around Rs 8.35 lakh crore.
What will be the effect on customersHDFC Limited Chairman Deepak Parikh on the merger said that with this we will be able to provide loans in agriculture, home loans and other sectors at a more affordable rate.
HDFC Ltd Shareholders will benefit: In this merger, HDFC Ltd shareholders will get 42 shares of HDFC Bank for 25 shares, while HDFC Ltd shareholders will get 41 per cent stake in HDFC Bank after this merger.
What will be the benefit of merger?: After HDFC Bank and HDFC Ltd, the operating cost of the company will come down. With this, it will help the company to expand rapidly in urban, semi-urban and rural areas.
Stocks jumped: After the news of the merger, there was a strong rally in all the companies of HDFC Group. At 12:44 PM, HDFC Bank was trading up 8.21 percent, HDFC Limited 7.48 percent and HDFC Life 3.72 percent in the market.