MUMBAI: HDFC Bank Ltd is expected to sell shares worth up to Rs 100 billion ($1.6 billion) as early as this week, with an offering that will include overseas and domestic stock, sources with direct knowledge of the matter said on Tuesday.

India's largest lender by market capitalisation, which is also listed in New York, last week received government approval for the share sale on the condition that its foreign ownership should not exceed 74 per cent.

HDFC Bank is likely to raise Rs 10,000 crore on Tuesday. The private lender is said to have appointed Bank of America Merrill Lynch to manage the share sale. The bank is considering a part-American depository receipt (ADR) issue and part-qualified institutional placement. Fund raising through the ADR route would be a smart move, as these are trading at a 10 per cent premium to domestic shares. Also, the fund-raising regime through this route has recently been eased.

We maintain a ‘buy’ rating on HDFC Bank and raise price target to Rs 1,255 (earlier Rs 1,240). The stock trades at 5x adjusted book value (December 2014) and 21.4x 12-month rolling earnings (Dec 15). Our target implies a forward book multiple of 4.4x and 20.0x earnings versus last eight-year averages of 3.9x and 19.8x, respectively.

Shares of Housing Development and Finance Corporation (HDFC) is continued their its upward march on the bourses, with the market value of the country's largest mortgage financier company crossing the Rs two lakh crore mark today.

HDFC scrip gained 2.6% to Rs 1,284 on BSE, taking its market value to Rs 2,01,726 crore at 1041 hours, the BSE data shows.

MUMBAI: HDFC Bank is working on digitizing every process that does not require a statutory `wet signature'. The bank will digitize submission of Form 15H which presently has to be physically submitted by senior citizens to the branch to avoid tax deduction at source.

Speaking to ToI, Nitin Chugh, head of the bank's digital banking said that the bank was moving to a system where customers would be required to use physical forms only where there is a legal requirement for the customer to sign such as on an account opening form.

Shareholders of Kotak Mahindra Bank today gave their approval to merge Bengaluru-based ING Vyaya Bank with itself.

At an extraordinary general meeting, shareholders of the Mumbai-based private bank approved the merger proposal. The exchange ratio has been fixed at 725 shares of Kotak with 1, 000 shares of ING Vysya.

Benchmark indices extended gains after a firm opening on Friday led by financials and index heavyweights ITC and Reliance Industries.

At 9:30AM, the 30-share Sensex was up 189 points a 27,696 and the 50-share Nifty was up 56 points at 8,340.

Housing Development Finance Corporation (HDFC) on Monday said Azim Premji Trust would buy 0.95 per cent stake in its life insurance venture, HDFC Life, for Rs 198.9 crore. The deal values HDFC Life at Rs 19,890 crore.

HDFC has concluded the sale of the first tranche of 11 million shares. After the entire sale of equity shares is completed, the company will hold 71.42 per cent of the total issued and paid-up equity capital of HDFC Life.

Markets are likely to open higher tracking gains in their Asian peers. However, some volatility may be expected later in the session as traders will remain cautious in a truncated week ahead of the F&O expiry on Wednesday.

For cues investors will also watch the US jobless data which is to be released later this week.

HDFC Bank and Ratnakar Bank (now known as RBL Bank) on Friday got clearance from the Foreign Investment Promotion Board (FIPB) for their respective foreign direct investment (FDI) proposals.

HDFC bank had applied for yet another FIPB approval, this time for expanding its equity base by up to Rs 10,000 crore, sources said.

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