HDFC becomes 5th largest company by market value, overtakes ICICI bank

Housing Development Finance Corp (HDFC) and HDFC Bank shares jumped on Monday after the financial firms announced a merger to make one of the biggest banking firms in the world. The merger brought the HDFC twins among the top five Indian companies by market value. The board of HDFC has approved the firm’s and subsidiaries’ merger with HDFC Bank.

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HDFC has total assets under management of Rs 5.26 trillion and a market cap of Rs 4.44 trillion, while HDFC Bank is India’s leading private sector bank with a market cap of Rs 8.35 trillion. HDFC Investments and HDFC Holdings are the two wholly-owned subsidiaries of HDFC.

Shares of HDFC jumped as high as 16.5% to Rs 2,855.4 on BSE, taking the company’s market capitalization to Rs 5,17,682 crore.

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ICICI Bank shares also surged amid strength across the financial segment. The share surged to a day’s high of Rs 748.50 and market capitalization stood at Rs 5,19,594.38 crore.

“If you look at the cost of funds that HDFC Bank has vis-a-vis HDFC limited, I think this merger will stand HDFC Limited better from a cost of funds standpoint. If you look at HDFC Bank, their mortgage book is not that big and if you have listened to the last few conference calls, they have spoken about growing their mortgage book in a very material way,” said Rahul Arora, CEO, Nirmal Bang Institutional Equities.

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Currently, Reliance Industries, Tata Consultancy Services, HDFC Bank, Infosys, ICICI Bank, Hindustan Unilever, State Bank of India, Bajaj Finance and Bharti Airtel are India’s most valued listed companies.

Indian stock market started the week on a positive note amid cautious gains across global markets as investors monitored news on the ongoing Russia-Ukraine war closely.

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The markets extended gains during early trades as the BSE Sensex rose 1,500 points to 60,780, while the Nifty50 index crossed the 18,000 mark for the first time in more than 10 weeks. A buying spree across sectors pushed the headline indices higher, with financial stocks being the biggest mover.