HDFC Bank shares will be in focus in the next 10 days due to its first-ever bonus issue. The record date is fixed on August 26, for a bonus ratio of 1:1. Ahead of this mega bonus reward, HDFC Bank is a top pick to buy in August 2025. The new target price is set at Rs 2,300.
HDFC Bank Share Price:
After market hours of August 14, HDFC Bank shares closed at Rs 1991.40 apiece on BSE, higher by 0.61% with a market valuation of Rs 15,28,387.09 crore.
So far, HDFC Bank has given double-digit returns. YTD, the stock is up nearly 12% on BSE.
HDFC Bank Bonus Issue:
The behemoth has announced its first-ever bonus issue in the ratio of 1:1. This means that the bank will issue 1 (One) equity share of Re. 1/- each for every 1 (One) fully paid-up equity share of Re. 1/- each held by the Members of the Bank as on the Record Date.
The record date and ex-date for the bonus issue are fixed on August 26, 2025.
The bank plans to complete its bonus issue action within 2 (two) months from the date of approval by the Board of Directors, i.e., on or before September 18, 2025.
As per the latest update, HDFC Bank informed exchanges that the Reserve Bank of India ("RBI") has to vide its letter dated August 13, 2025, approved utilization of the Share Premium Account for issuance of bonus shares and also amendment to be carried out in the Memorandum of Association of the Bank in respect of the clause about increase in the authorized share capital, subject to compliance with applicable laws.
Why BUY HDFC Bank Share Price?
According to Axis Securities, HDFC Bank has been consistently performing on its guidance in its endeavour to revert to its pre-merger levels across metrics, and its execution capabilities remain strong. With LDR at a
Analysts at the brokerage added, "While near-term pressures on NIMs will weigh on earnings, healthy fee income growth, controlled costs, and pristine asset quality, keeping credit costs benign, will offset the impact of margin compression. We expect HDFCB's RoA/RoE to improve to 1.9%/15-16% over FY27-28E vs 1.7%/13.6% in FY26."
Overall, the analysts are expecting HDFC Bank to deliver a healthy 14% CAGR advances growth over FY25-28E, against deposits growth of ~17% CAGR over the same period. Resultantly, LDR is set to improve to ~88% by FY28E (near pre-merger levels).
In Q2FY26, the management expects NIMs to remain under pressure and are likely to bottom out with the Jun'25 repo rate cut (of 50bps) reflecting in the yields. The SA rate cut taken by the bank reflected in the CoF (down 10bps QoQ); however, the TD repricing is expected to happen with a lag, given the average tenor for TDs is ~12-18 months. Margins are expected to stabilise from H2FY26 onwards as the deposits reprice downwards, as per the brokerage.
Also, the bank made a floating provision of Rs 90 Bn and a contingent provision of Rs 17 billion, which is purely towards strengthening the balance sheet and not towards any risks emerging across segments. Resultantly, credit costs are expected to remain benign at ~50bps (+/-5bps) over the medium term.
Thereby, the analysts have recommended BUY for a target price of Rs 2300.
About HDFC Bank:
The bank has over 9,000 branches and 20,000 ATMs spread across 4,000+ Indian cities. Key subsidiaries of the bank post the merger with HDFC Ltd. are HDFC Life, HDFC ERGO General Insurance, HDFC AMC, HDB Financial, and HDFC Securities.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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