HDFC Bank Achieves Historic Milestone, Ranks Among World's Top 10 Banks By Value

HDFC Bank, one of India's leading private sector banks, has reached a significant milestone in its growth trajectory. Following its merger with HDFC Ltd, the bank has achieved record-breaking success, propelling it to become one of the world's top 10 banks by value, Reuters Reported.

HDFC Bank's stock witnessed an impressive surge of 3.3%, reaching an all-time high of 1,757.50 rupees. Simultaneously, HDFC Ltd.'s shares also experienced substantial growth, rising by 3.7% to 2,927.40 rupees, marking the highest level since the merger announcement in April 2022.

A financial giant that can now guarantee bigger ticket loans, including those for infrastructure, was created by the $40 billion merger, which was the largest in India's business history. It finalised on June 30.

The housing financing company's stock has increased by over 17%, beating the roughly 9% increase in the benchmark Nifty 50 index (.NSEI), while the private lender's shares have increased by nearly 14.5% since the acquisition was announced.

According to calculations by Reuters, this results in a market capitalization for the merged company of almost $157 billion, which is more than that of major international lenders like Morgan Stanley (MS.N) and HSBC Holdings (HSBA.L). Even yet, Morgan Stanley thinks HDFC Bank is valued favourably.

"The merger is synergistic. HDFC Bank gets access to secured and long-tenor retail mortgage products as well as a large customer base," the brokerage said in a note dated July 2.

It anticipates that the loan growth of the combined company will increase from the present 15%-16% to 17%-18% in four quarters, especially as mortgage loan growth increases.

The company has recommenced its coverage of HDFC Bank, assigning it an "overweight" rating with a target price of 2,110 rupees per share. This target price suggests a significant potential increase of 26% from the bank's most recent closing price.

The managing director and managing director of HDFC Bank, Sashidhar Jagdishan, has an equally optimistic objective.

"The pace at which we aim to grow, we could be creating a new HDFC Bank every 4 years," Jagdishan told employees over the weekend.

The combined company will be "best positioned" to take advantage of expansion, according to him, since it has a significant and expanding distribution and customer franchise, ample capital, healthy asset quality, and profitability.

The "record date" for the share exchange between HDFC and HDFC Bank for its shareholders is July 13.