The merger of HDFC Bank Ltd and Housing Development Finance Corp., which became effective on July 1st, has positioned the combined entity as one of the leading banking firms worldwide. With a market capitalization of approximately $172 billion, the merged bank secures the fourth position globally, following JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp., according to Bloomberg’s data. This merger marks a significant development in the Indian banking sector, consolidating the strengths of both institutions and enhancing their competitiveness on a global scale.
Overview of the news
- According to Bloomberg, following the merger, the new HDFC Bank entity will secure the fourth position in equity market capitalization, trailing behind JP Morgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp. The combined value of the merged bank will be approximately $172 billion.
- Post-merger, the customer base of the new HDFC Bank will expand to around 120 million, and its branch network will grow to over 8,300 branches, supported by a workforce exceeding 177,000 employees. As a result of the merger, HDFC Bank will surpass its peer banks such as State Bank of India and ICICI Bank in terms of market capitalization.
- In the months leading up to the merger, shares of HDFC Bank experienced a continuous rally, indicating high levels of investor confidence. Notably, JPMorgan is the bank’s largest investor. Additionally, the bank’s contingent convertible bonds, which are considered the riskiest form of debt that can convert to equity in times of financial distress, have outperformed similar bonds offered by other global banks.
Top ten Indian banks (in terms of market capitalisation)
|Rank||Bank||Mcap ( ₹crore)|
|1.||HDFC Bank (post merger)||14,12,055.5|
|2.||ICICI Bank Ltd||6,53,704.04|
|3.||State Bank of India||5,11,201.77|
|4.||Kotak Mahindra Bank Ltd||3,66,967.55|
|5.||Axis Bank Ltd||304211.88|
|6.||Indusind Bank Ltd||106707.03|
|7.||Bank of Baroda||98436.88|
|8.||IDBI Bank Ltd||59482.29|
|9||Punjab National Bank||56882.91|