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
Weight of combined entity in indices is expected to be about 14%; schemes may have to remain underweight on the stock as the single stock exposure in portfolio has to be capped at 10%
There is a risk index trackers may have to sell HDFC, which is part of global indices currently
The transaction involves the amalgamation of HDFC and its two wholly-owned subsidiaries HDFC Holdings and HDFC Investments with HDFC Bank
Profitability could to take hit in the short run
"It will take about 15 to 18 months. We are quite hopeful that we will get the approvals from the regulators," Parekh said
Parekh said he is confident that the regulators will approve the merger scheme announced earlier in the day
The merged entity could become the highest weightage single company in the Nifty 50 basket, the brokerage house said.
Mirroring the rally in the stock, market capitalisation of HDFC zoomed to Rs 4,85,691.18 crore
CLOSING BELL: Besides, Kotak Bank, HUL, IndusInd Bank, Tata Steel, L&T, and Sun Pharma were the other top gainers
Shares of HDFC and HDFC Bank rose as high as 14 per cent and 11 per cent, respectively, during the opening session on Monday.
Shares of HDFC Bank may hit the Rs 2,000-mark, while HDFC is likely to rally towards Rs 3,200.
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.
The HDFC Bank and HDFC Ltd. merger is expected to be completed by Q2/Q3 of FY24
The share exchange ratio for the amalgamation of HDFC with and into HDFC Bank shall be 42 equity shares of face value of Re 1 each of HDFC Bank for every 25 equity shares of face value of Rs 2 of HDFC
The growth in advances was about 8.6% over Rs 12.60 trillion as of December 31, 2021, the bank informed BSE
The top 10 valued domestic firms added a whopping Rs 2,61,767.61 crore to their total market valuation last week in tandem with a buoyant trend in equities
Last week, the Sensex zoomed 1,914.49 points or 3.33 per cent.
They're at par with normal fixed deposits but not all banks offer these
The unsecured lending book for the bank includes credit cards and personal loans