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HDFC Bank and HDFC merger creates a financial powerhouse

July 03, 2023

HDFC Bank and HDFC merger creates a financial powerhouse
HDFC Bank and its subsidiary HDFC Ltd have got merged, solidifying the group’s position as the biggest player in the banking and housing finance sectors. The amalgamation, which took effect on 1 July 2023, marks a significant milestone for both entities and holds promise for investors and customers alike.

With the completion of this merger, HDFC Bank is set to become the second most valuable Indian company in terms of market capitalisation and the fourth largest bank in the world by market capitalisation, behind global banking giants such as JP Morgan Chase & Co, Industrial and Commercial Bank of China Ltd (ICBC), and Bank of America Corp.
 
The merger brings together the complementary strengths of HDFC Bank and HDFC. HDFC, the country’s first home finance company, will now cease to exist as an independent entity. The integration of these two entities will result in a net worth of over ₹4.14 lakh crore and a combined asset base of more than Rs18 lakh crore.
 
From a market perspective, the amalgamation significantly impacts the Indian stock market. The joint market capitalization of HDFC Bank after the merger is expected to exceed ₹14,73,953 crore, surpassing Tata Consultancy Services (TCS), making HDFC Bank the second most valuable Indian company after Reliance Industries Ltd (RIL). Furthermore, the relative weight of HDFC Bank in the Nifty index is set to increase, challenging the dominance of Reliance Industries as the most prominent Nifty stock.
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