HDFC, HDFC Bank merger: Analysts see banking industry consolidating

The banking sector, according to analysts at ICICI Securities, has been underperforming at the bourses against the overall market in the last six months largely due to credit growth concerns

The merger of HDFC and HDFC Bank can trigger a consolidation in the banking industry, feel analysts. Barely a few days after Axis Bank took over the Indian consumer business of Citibank, India's largest private lender HDFC Bank announced that it will merge with housing finance firm HDFC Ltd.

As part of the deal, shareholders of HDFC Ltd will receive 42 shares of the bank for 25 shares held. Existing shareholders of HDFC Ltd will own 41 per cent of HDFC Bank. Shares held by