HDFC merger to create worlds fourth largest bank by mkt cap

economictimes.indiatimes.com:

HDFC Bank on Friday, approved the merger between the two institutions effective from today (July 1) creating the world's fourth biggest bank by market value behind J P Morgan, ICBC and Bank of America. All share and warrant holders of HDFC as of July 13 would be eligible for HDFC Bank shares. July 12 has been set as the date for the transfer of non-convertible debentures (NCDs) of HDFC in the name of HDFC Bank.

While commercial papers of HDFC will be transfered to HDFC Bank from July 7. HDFC Bank will issue and allot eligible shareholders 42 new equity shares for every 25 equity shares held by shareholders of HDFC Ltd as on July 13. “This is a defining event in our journey and I’m confident that our combined strength will enable us to create a holistic ecosystem of financial services,'' said Sashi Jagdishan, CEO, HDFC Bank.

``As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry”. From a market capitalisation of less than Rs. 500 crores as mortgage firm in the 80s, the HDFC and HDFC Bank merger will create world’s fourth biggest bank by market value behind JPMorgan, ICBC of China and Bank of America, according to Bloomberg calculations.

The combined market cap of all HDFC listed entities currently is Rs. 16.63 lakh crores. «The larger net-worth would allow greater flow of credit into the economy.

It will also enable underwriting of larger ticket loans, including infrastructure loans and contribute further to nation building and employment generation,» the two entities said a in a press release. All employees of HDFC will become HDFC Bank employees from today. Post merger, the key