HDFC & HDFC bank merger Ratio, Is it right to merge HDFC & HDFC Bank

 Reason behind HDFC & HDFC Bank Merger :

Ever since the news of the approval of the merger of HDFC with HDFC Bank came in the Indian stock market, the shares of both the companies saw a great rise.

On the day when this new Indian stock came in the market, HDFC's stock rose 13.60% on BSE and HDFC Bank's stock also saw a rise of about 10%, but after that profit booking started to the shareholders of both the companies. I do not understand what should be done in the stock of these companies before the merger. We have come up with a solution to this problem for the viewers of our website. First of all, it is important to understand some important things that after all HDFC is being merged with HDFC Bank and what are the advantages and disadvantages of this merger to the shareholders.

Question:

Is it right to merge HDFC & HDFC Bank?

Answer:

Housing finance business can be expected to pick up pace due to various other factors like getting infrastructure status to the housing sector, implementation of RERA and government initiatives on affordable housing.

If seen, in the last few years, there has been an emphasis on improving many regulations of banks and NBFCs, Affordable housing has been promoted and all priority sectors including agriculture are being given more credit than ever before. With this, the large balance sheet is getting an opportunity to arrange large infrastructure loans. At the same time, the credit growth of the economy is getting boosted. In this way, merging hdfc with HDFC bank will be considered as a single step.

Question:

When will HDFC be merged with HDFC Bank?

Answer:

HDFC can be merged with HDFC Bank by the second or third quarter of the next financial year and under this deal, HDFC will have 41% stake in HDFC Bank. Most importantly, the company's shareholders and creditors (debt takers) will also be included in this merger.

Question:

Why HDFC is being merged with HDFC Bank?

Answer:

HDFC & HDFC Bank was told in the board meeting that if HDFC is merged with HDFC Bank, then this deal can improve the housing loan portfolio of HDFC Bank and will also help in increasing the existing customer base.

 If financial terms go by, then the balance sheet of the entity formed by merging HDFC with HDFC Bank will be huge and this will increase the market power of HDFC group in the financial market. However, experts were already feeling the need for this merger.

This merger could be more profitable for HDFC Ltd as its business is less profitable. From the perspective of HDFC Bank, with this merger it will be able to strengthen its loan portfolio. It will be able to offer its products to more people.

Question:

What will be the impact of the merger of HDFC & HDFC Bank on the shareholders?

Answer:

HDFC & HDFC Bank Merger Ratio:

Under the merger of HDFC Ltd and HDFC Bank, for every 25 shares of HDFC Ltd, 42 shares of HDFC Bank will be given. Or in simple words, if you have 10 shares of HDFC Ltd, then under the merger you will get 17 shares.

Question:

When will the merger of HDFC & HDFC Bank be completed?

This merger of HDFC and HDFC Bank will be completed by the second or third quarter of FY 2024.

Question:

What will be the impact on HDFC Bank after the merger of hdfc?

Answer:

The merger of hdfc with hdfc bank can be considered a good merger because after this merger, HDFC bank will become the second largest company in the country.

Question:

What are the total assets of HDFC & HDFC Bank?

Answer:

Let us tell you that as of December 31, 2021, HDFC's total assets are Rs 6.23 lakh crore and business is Rs 35,681.74, while HDFC Bank's total assets are Rs 19.38 lakh crore.

Question:

What is the difference between the businesses of HDFC and HDFC Bank?

 Answer:

If we speak in simple words then HDFC is a housing finance company. The major business focus of HDFC is to provide loans for purchase of properties including houses and shops. On the other hand, HDFC Bank is involved in all financial services like loan, account opening or FD etc.