What should investors do with Nykaa? Devang Mehta answers

economictimes.indiatimes.com:

«The subsidiaries of HDFC, of course, the companies like HDFC Life or HDFC Securities or for that matter even HDFC AMC also comes under the umbrella of HDFC Bank and it creates a huge sort of a banking conglomerate,» says Devang Mehta, Spark Private Wealth.Let us discuss one of those important cues HDFC twins, HDFC merger which is lined up. What do you think changes for the market and for the prospect of this behemoth itself? Do you think in the near term, the growth will slow down? I think clearly what the market is looking at the merger of HDFC and HDFC Bank is that we clearly get a big conglomerate in terms of financial strength.

I think the cost of credit for a giant like even HDFC comes down when it merges with the bank. The subsidiaries of HDFC, of course, the companies like HDFC Life or HDFC Securities or for that matter even HDFC AMC also comes under the umbrella of HDFC Bank and it creates a huge sort of a banking conglomerate.

We all know that it becomes the third or the fourth largest in the world but, of course, importantly what will also happen is that when you create this type of a big entity yes probably the growth that was about to come for both these entities together might see a bit of slowdown for a couple of quarters while adjustments happen but I can assure that in a way what feels is that these are some companies which probably are market leaders in their own right. For example, HDFC is a market leader in terms of its lending strength for housing finance.

HDFC Bank, of course, grows at minimum 18% to 20% every quarter. So, the sense one gets over here is that investors who are invested would stay invested in this company, a big entity, and most of the foreign investors also want to sort of