17-Jul-2023
2 mins read
In a recent development that marks a milestone in the history of Indian banking, HDFC Bank, India’s leading private sector lender, has joined the exclusive $100 billion market capitalisation club. This significant achievement follows a massive $40 billion reverse merger deal with parent entity HDFC Ltd.
HDFC Bank Surpasses Global Giants
Now trading at an impressive market value of around $151 billion or Rs 12.38 lakh crore, HDFC Bank stands as the world’s seventh largest lender. This astounding figure places the Indian banking giant ahead of other international banking behemoths such as Morgan Stanley and the Bank of China.
HDFC Bank is only surpassed by JPMorgan ($438 billion), Bank of America ($232 billion), China’s ICBC ($224 billion), Agricultural Bank of China ($171 billion), Wells Fargo ($163 billion), and HSBC ($160 billion).
A Merger of Magnitude
The merger between HDFC Ltd and HDFC Bank officially came into effect on July 1. The unique arrangement, which saw the ‘son’ (HDFC Bank) taking over the ‘father’s’ (parent entity HDFC) business, has strengthened the market cap of the merged entity. With this, HDFC Bank now holds more m-cap muscle than renowned global investment firms like Morgan Stanley ($143 bn) and Goldman Sachs ($108 bn).
On July 13, the shares of HDFC Ltd were officially discontinued from trading on stock exchanges. This followed the record date of July 12, which determined eligible shareholders for share allotment.
Stock Allocation Details
On July 16, the bank allocated 3,11,03,96,492 new equity shares, each with a face value of Rs 1, to the eligible shareholders of HDFC Ltd. This was part of the all-stock merger deal, under which every HDFC shareholder received 42 shares of HDFC Bank for every 25 shares they held in the company.
As a result, the bank’s paid-up share capital soared from 559,17,98,806 shares to 753,75,69,464 shares. As of Monday, the stock was trading at Rs 1,641.50, slightly lower by 0.22%.
Standing Tall in India
Even with this notable accomplishment, HDFC Bank continues to be the third largest company in market value on the BSE, only surpassed by Reliance Industries (Rs 18.6 lakh crore) and TCS (Rs 12.9 lakh crore). Concurrently, ICICI Bank, holding the fourth place domestically, has secured the 19th position among the world’s leading lenders, with a market cap of $82 billion or Rs 6.68 lakh crore.
As HDFC Bank carves out a prominent position on the international platform, we look forward to the promising developments this banking heavyweight has in store.