The merger of HDFC into HDFC Bank is likely to create the third-largest entity in India in terms of market capitalisation.
In an exchange filing, HDFC announced that the company will merge itself with HDFC Bank following a union of subsidiaries HDFC Holdings and HDFC Investments. A similar announcement was made by HDFC Bank in a separate exchange filing.
HDFC said that its shareholders will get 42 shares of HDFC Bank for every 25 shares of the non-banking lender held by them.
Based on the market capitalisation of HDFC and HDFC Bank as of April 1, the market value of the merged entity will be close to Rs 12.8 lakh crore. HDFC said that it will hold a 41 percent stake in the merged entity.
Analysts suggested that the merger will create the biggest stock in terms of weight in the Nifty50 index, easily surpassing Reliance Industries’ current weight of 11.9 percent. As of March 31, HDFC Bank’s weight on the index was 8.4 percent while that of HDFC was 5.66 percent.