All about HDFC & HDFC Bank Merger

Key points on HDFC and HDFC Bank merger

Here are some of the important details that you need to know about the merger between HDFC and HDFC Bank:

Current size– HDFC Bank boasts of more than 6,300 branches across the country catering to nearly 3,000 cities and towns. More than half of the bank’s branches are strategically located in semi-urban and rural areas. This will benefit the merged entity through product offerings surrounding affordable housing.

Deal size– The merger will result in a combined balance sheet of nearly Rs. 17.87 lakh crores. Post the merger, the combined entity’s net worth is estimated to be Rs. 3.3 lakh crores, thus making HDFC Bank nearly double the size of ICICI Bank. The merger will also enable the merged entity to carry out underwriting at a substantially larger scale.

Opportunities– 70% of HDFC customers are currently not associated with HDFC Bank. Once the merger is executed, the bank will gain from significant cross-selling opportunities.

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Competition – This merger will place the combined entity in a very strong place to be capable of countering competition and will further make the mortgage business more competitive.

Mortgage scale– HDFC Bank’s mortgages saw a CAGR of 24.5% standing at Rs. 702.2 billion in 2021. Post the merger, the firm’s loan book will see large contributions from mortgages as these will account for nearly 33% considering the segment is rapidly growing.

Management – The merged entity will be led by HDFC Bank’s current CEO Sashidhar Jagdishan. The entire senior management team of HDFC Ltd along with its employees will be retained post the merger.

Merger news is making the business media busy. Upon merger, the

bank will become the fourth-largest lender by market capitalization - bigger than Morgan Stanley.

Experts believe that HDFC Bank will see a $29 million inflow on rebalancing. Its weightage in Nifty

50 is likely to go up from 26.3 percent to 27.3 percent