HDFC will Merge into HDFC Bank

On Monday, HDFC and HDFC Bank announced a merger. According to the deal, HDFC will be merged with HDFC Bank and the shareholders of HDFC Bank will become 100% shareholders of HDFC. After this news, shares of both companies have soared on the Indian bourses. Shares of HDFC increased by 15%, and HDFC Bank’s shares rose nearly 14% on April 4 morning. As per the announcement, shareholders of HDFC, for every 25 shares held in HDFC will receive 42 shares in HDFC Bank. With the merger both the companies expect to utilize each other strengths for further expansion and growth. Both the companies are unmatched players in their sector. While HDFC is the largest player in housing finance and HDFC Bank is the biggest private-sector bank in India. After the merger, the Chief executive officer of HDFC Bank, Sashi Jagdishan said: “The proposed transaction ticks all the right boxes in terms of completion of product offerings, product leadership in home loans as with other retail assets products, distribution strength across the country and a customer base that can be leveraged to cross-sell a complete suite of financial products.” Also, the company said it could take up to 18 months to receive the required regulatory approvals for the merger. Keki M Mistry, the chief executive officer of HDFC, said, “With the leadership that we have built-in housing finance and the deep understanding of the housing market across various economic cycles, this transaction helps in realizing the potential of what HDFC’s housing finance business can achieve by leveraging the distribution and customer base of HDFC Bank.”