HDFC Bank merges with HDFC after 15 months.

HDFC Bank, the largest private lender in India, has completed its merger with Housing Development Finance Corporation (HDFC), which is also the biggest mortgage lender in the country. While each of them is a giant, the integration boosts their power as they become a holistic entity. The new deal pits the joint venture against existing banking giants in the world.

In April 2022, HDFC Bank announced it would acquire its parent company, HDFC, in a $40 billion all-stock deal. At the time, the bank said the merger would create an extensive balance sheet and net worth, resulting in greater credit flow into the economy. About 15 months after revealing the alliance, HDFC Bank finally completed its merger with HDFC on June 30 and became effective on July 1. This follows all necessary approvals, including the green light from shareholders and regulators.

HDFC Merger

According to Waterfield Advisors’ CEO and founder Soumya Rajan, the new entity following HDFC and HDFC Bank’s merger will be the fourth largest bank by market cap. The other top three are JPMorgan Chase (NYSE: JMP), the Industrial and Commercial Bank of China, and the Bank of America (NYSE: BAC). He added that HDFC is now the second-largest company in India by market cap. Rajan stated that the new entity now boasts a market cap of almost $172 billion.

In addition, the HDFC merger means both parties will utilize their significant features and services to create substantial value. Hence, shareholders, employees, and respective customers are positioned to enjoy the benefits of the alliance. All HDFC shareholders will get 42 shares of HDFC Bank for every 25 shares they own. Come July 13, HDFC will stop operating on the Indian stock market.

The CEO & MD of HDFC Bank, Sashi Jagdishan, spoke on the merger:

“This is a defining event in our journey and I’m confident that our combined strength will enable us to create a holistic ecosystem of financial services. We’re truly happy to welcome the talented team of HDFC Ltd. into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence.”

Jagdishan added that the team is ready to face challenges that may arise from the integration as they try to set a standard of success and integrity in the financial services industry. Moving forward, all HDFC Ltd. workers have now become HDFC Bank employees due to the merger. The bank has also been preparing to welcome the new teammates for months.