Following a major merger, HDFC climbs to fourth place among the world’s most valuable banks

HDFC climbs to fourth place among the world's most valuable banks

On Saturday, HDFC Bank will take control of its parent company, housing financing giant HDFC, in what is being referred to as the largest transaction in the history of India Inc. The nation’s first home loan company would vanish after the reverse merger.

In-depth details about following a major merger, HDFC climbs to fourth place among the world’s most valuable banks

After the merger, an Indian corporation would, for the first time, be among the most valuable banks in the world, posing a fresh threat to the biggest American and Chinese lenders currently holding the top slots, according to Bloomberg.

On April 4, 2022, HDFC Bank announced that it would acquire its parent, the largest pure-play mortgage lender, in a $40 billion all-stock transaction, forming a financial services juggernaut with a combined asset base of more than 18 lakh crore.

According to data gathered by Bloomberg, the combination of HDFC Bank Ltd. and Housing Development Finance Corp. produces a lender that comes in fourth in terms of stock market capitalization, after JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp. It is estimated to be worth $172 billion.

Additionally, it heralds HDFC Bank’s evolution into a financial services conglomerate that, through its subsidiaries, provides the whole range of financial services, from banking to insurance and mutual funds, the bank added.

According to a presentation made when the merger was announced, only 2% of the lender’s clients had a mortgage product from HDFC Ltd., thus the lender will be able to offer in-house home loan products to them.

The principal subsidiaries of HDFC Bank after the merger include HDFC Securities Ltd, HDB Financial Services Ltd, HDFC Asset Management Co Ltd, HDFC ERGO General Insurance Co Ltd, HDFC Capital Advisors Ltd, and HDFC Life Insurance Co Ltd.

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