Team Blitz India
NEW DELHI: Red on left side, blue on the right, merging together to make one new composite logo combining both red and blue.
Readers of major English dailies in the country were greeted by this jacket advertisement which opened the two halves of the page like a door to announce that a ‘new chapter’ had begun.
India’s number 1 home loan company HDFC, based on loan book size and market capitalisation on the Bombay Stock Exchange (BSE), has merged with HDFC Bank.
In technical terms, it was a takeover by HDFC Bank of its parent housing finance major, HDFC on July 1. The reverse merger, in what is being touted as the biggest transaction in the history of India Inc., will lead to the extinction of the country’s first home finance company, Housing Development Finance Corp.
A new challenger
According to a Bloomberg report, an Indian company will for the first time rank among the world’s most valuable banks after completing the merger, marking a new challenger to the largest American and Chinese lenders occupying the coveted top spots. HDFC Bank is now fourth in equity market capitalisation, behind JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp., according to data compiled by Bloomberg. It is valued at about $172 billion.
The bank will also leave behind its Indian peers State Bank of India and ICICI Bank, with market capitalisations of about $62 billion and $79 billion, respectively, as of June 22.
All-stock deal
It was on April 4, 2022 that HDFC Bank agreed to take over its parent in a $40-billion all-stock deal, creating a financial services titan with a combined asset of over Rs 18 lakh crore.
The total business of the merged entity stood at Rs 41 lakh crore at the end of March. With the merger, the net worth of the entity would be over Rs 4.14 lakh crore. The combined profit of both entities was about Rs 60,000 crore at the end of March. The new HDFC Bank entity will have around 120 million customers, more than the population of Germany.
