Merged HDFC Bank: New entity will have market capitalisation of Rs 12.5 trn

Starting Thursday, the merged HDFC Bank will take shape while its parent Housing Development Finance Corporation (HDFC) will cease to exist. The new entity will have a market capitalisation of Rs 12.5 trillion, making it the second-most valuable firm after Reliance Industries (RIL), which is currently valued at Rs 18.5 trillion.
 

However, given its large free float, HDFC Bank will dislodge RIL as the biggest weight in the Nifty50 and the Sensex. As per Nuvama, the merged entity will have 14.43 per cent weighting in the Nifty50, nearly 363 basis points more than RIL. In the Bank Nifty index, HDFC Bank’s weighting will rise to 29.1 per cent.
 

The new shares to be issued to HDFC’s shareholders of the merged entity could take another 10-12 days to reflect in the demat account, said market players. But for the sake of index composition and trading, HDFC Bank will be treated as the merged entity from Thursday, they added.
 

The merged HDFC Bank will have 7.53 billion outstanding equity shares. Due to the merger, 1.85 billion shares of HDFC will be converted to 3.1 billion shares for HDFC Bank. HDFC’s shareholding in the lender gets extinguished.
 

With a market cap of $150 billion, HDFC Bank will become the fourth most valuable bank globally and second biggest in Asia.

The lender will also become one of the most-profitable corporations in the country. On a pro-forma basis, the merged entity had net profit of Rs 60,348 crore in the 2022-23 financial year (FY23).
 

Meanwhile, RIL had reported a consolidated net profit of Rs 66,702 crore and ICICI Bank Rs 34,037 crore in FY23.