HDFC twins gain up to 3% after they fix July 13 as record date for merger

Shares of Housing Development Finance Corporation (HDFC) and HDFC Bank gained up to 3 per cent on the BSE in Monday’s intra-day trade, extending their past three days' upward movement, after their respective Boards fixed July 13 as the record date for determining the shareholders of the Corporation who shall be issued and allotted the shares of HDFC Bank.

With the deal getting effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold. Besides, July 13 has been fixed for the continuation of warrants of HDFC Limited in the name of HDFC Bank.

Shares of HDFC Bank hit a record high of Rs 1,744.70, as they gained 2.5 per cent on the BSE in the intra-day trade today. It surpassed its earlier high of Rs 1,733.95, hit on May 4, 2023.

Shares of HDFC, too, hit a 52-week high of Rs 2,900.60, rising3 per cent on the BSE in the intra-day trade today. The stock surpassed its previous high of Rs 2,867, touched on May 4, 2023.

In the past four trading days, these stocks have surged 7 per cent. In comparison, the S&P BSE Sensex was up 0.71 per cent at 65,175 at 09:51 am.

The boards of directors of the Corporation and HDFC Bank, at their respective board meetings held on June 30, 2023, have approved Saturday, July 1, 2023, to be the 'Effective Date' of the Scheme, on which date the certified order of the National Company Law Tribunal, Mumbai bench (NCLT) sanctioning the Scheme will be filed by HDFC Investments, HDFC Holdings, the Corporation and HDFC Bank with the RoC.

HDFC Bank had said that the merged entity brings together significant complementarities existing between them and is poised to create meaningful value for various stakeholders.

HDFC Bank is expected to deliver higher than industry growth with RoA of around 2 per cent in FY25E. Analysts at ICICI Securities remain positive and retain BUY rating on the stock. “We value HDFC Bank at ~2.5x FY25E ABV (post merger) and Rs 155 for subsidiaries and revise our target price to Rs 2050/share from Rs 1970 earlier," the brokerage firm said.

HDFC Bank