HDFC Shares: Shares of HDFC Bank and HDFC soared 10% in early trading after the two companies revealed a merger plan on Monday. On the BSE, HDFC Bank’s stock rose 9.99 percent to Rs 1,656.90, up from Rs 1,506.30 at the previous close. Similarly, shares of mortgage lender HDFC rose 10% to Rs 2,696 today, up from Rs 2,450.95 the day before.
HDFC Bank’s board of directors approved the merger of HDFC Investments and HDFC Holdings with HDFC and HDFC into HDFC Bank on Monday, announcing the establishment of a financial behemoth. In the merger between HDFC and HDFC Bank, 42 HDFC Bank shares will be exchanged for every 25 HDFC shares.
Following the aforementioned, public shareholders will own 100% of HDFC Bank, while existing HDFC shareholders would possess 41% of the company.
The planned merger, according to HDFC Bank, will allow the bank to expand its housing loan portfolio and expand its existing client base. The planned transaction, according to the private lender, is focused on leveraging the companies’ considerable complementarities.
HDFC Bank is a private sector bank with a customer base of more than 6.8 crores. According to HDFC Bank, the bank platform will provide a well-diversified low-cost funding basis for increasing the long-tenor loan book acquired as part of the proposed acquisition.
“The merging of HDFC Limited and HDFC Bank is completely complementary to HDFC Bank’s value proposition and enhances it,” it added.