HDFC twins hit 52-week highs post merger; surge up to 4%

Shares of private lender HDFC Bank and Housing Development Finance Corporation (HDFC), the country's biggest mortgage lender, surged up to 4% in intraday trade on Monday and touched their respective 52-week highs as investors remained bullish on the stocks post merger on July 1. The HDFC twins have been rising for the last four sessions and gained up to 7.5% each during the same period.

On Monday, HDFC Bank shares opened 0.8% higher at ₹1,714.90 against the previous closing price of ₹1,701.75 on the BSE. During the session so far, the banking heavyweight climbed as much as 3.3% to hit a 52-week of ₹1,757.80, while the market capitalisation rose to ₹9.65 lakh crore. The stock has risen 32% in the last 12 months, from its 52-week low of ₹1,330.30 touched on July 1, 2022.  

In a similar trend, HDFC share price opened the day at ₹2,844, up 0.8% compared to Friday’s closing price of ₹2,821.50 on the BSE. Extending opening gains, the counter rose 3.7% to touch a 52-week high of ₹2,926, while the market capitalisation increased to ₹5.32 lakh crore. The blue chip stock has rallied 37% in the last one year, from its 52-week low of ₹2,133.45 hit on July 1, 2023.

Shares of HDFC will get delisted from stock exchanges on July 13 and will begin trading under HDFC Bank ticker and the existing shareholders of the mortgage lender will receive 42 shares of HDFC Bank for every 25 shares they hold. The record date for the share swap between shareholders of HDFC and HDFC Bank is scheduled on July 13, 2023.

Post the amalgamation, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of HDFC Bank. The merger is touted to be the biggest transaction in India's corporate history and the proposed entity will have combined assets of nearly ₹15 lakh crore, which will be second largest after Reliance Industries (₹17.63 lakh crore). 

In a meeting on June 30, the board of HDFC Bank had approved July 1, 2023, to be the ‘effective date’ of the scheme of amalgamation of HDFC Investments, and HDFC Holdings, wholly owned subsidiaries of the HDFC, with HDFC and into HDFC Bank. The two listed subsidiaries of HDFC - HDFC Life Insurance Company and HDFC Asset Management Company - have also become subsidiaries of HDFC Bank with effect from July 1, 2023. Besides, two insurance companies - HDFC Life Insurance Company and HDFC Ergo General Insurance Company - have also become subsidiaries of HDFC Bank post merger.

HDFC Bank has also become co-sponsor of HDFC Mutual Fund, in place of HDFC with effect from July 1, 2023.

“The offices of directors and key managerial personnel of HDFC Investments, HDFC Holdings and HDFC Limited have stood vacated with effect from July 1, 2023,” HDFC Bank said in a regulatory filing.

Post amalgamation, the authorised share capital of HDFC Bank has increased to ₹11.90 crore divided into 1,190.61 crore equity shares of ₹1 each.

Last Friday, Deepak Parekh, who oversaw the HDFC-HDFC Bank merger, announced his retirement after serving HDFC as chairman for more than four decades. He stepped down from his position on June 30. 

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