Tuesday, 4 July 2023, Bengaluru, India
Following a busy week for one of India’s leading private lenders, HDFC, the time finally arrived when the corporation outshone the market, reaching a historic milestone. On Monday, after the HDFC-HDFC Bank merger, HDFC shares soared to a record high. With the merger poised as a lifesaver, it has already started to show bright colors for the private lender. Propelling HDFC Bank into the top ten list of the world’s biggest lenders, the merger has seemingly justified its cause, and people cannot wait for what is in the package for the future.
After a busy week, HDFC Bank’s shares surged as much as 3.3 percent on Monday. The shares surged in early trade to reach an all-time high in share prices. On Monday, HDFC Bank recorded its best-ever share price in the market priced at Rs 1,757.50. On the other hand, HDFC’s share increased by 3.7 percent to Rs 2,927.40. This is the highest it has reached since the merger was announced in April 2022.
According to the market capitalization recorded, HDFC has currently made it to the list of the top ten private lenders in the market. Valuing at approximately $157 billion, HDFC’s combined entity, including HDFC and HDFC Bank, has now surpassed globally renowned lenders such as Morgan Stanley and HSBC Holdings.
According to the reports, the merger was India’s largest to date, valued at $40 billion. This high-level merger takes HDFC to another level and creates opportunities for the financial powerhouse to authenticate larger ticket loans, including those for infrastructure.
It has worked brilliantly for both corporations individually after the merger. HDFC and HDFC Bank have managed to get their shares to an all-time high in a matter of days. According to the benchmark Nifty 50 index, HDFC and HDFC Bank had gains of about 14.5 percent and over 17 percent, respectively. The deal was announced in April 2022, and almost a year later, HDFC and HDFC Bank managed to do the unthinkable.
As per leaders in the industry, it is quite noticeable that the merger between HDFC and HDFC Bank has made their valuation very attractive. According to market analysts Morgan Stanley, the synergies created by the merger have done immensely well for the corporation. The private lender gains access to a broad customer base and secured long-tenor retail mortgage products, which are expected to drive loan growth.
The market leader Morgan Stanley, predicts that HDFC-HDFC Bank’s loan growth will fuel strongly a 17-18 percent increase in the coming quarters. Their current status is at 15-16 percent, which is also impressive. However, the current loan rate is primarily focussed on mortgage loans.
Morgan Stanley is a renowned establishment, and their opinions and analysis matter the most in the field. As is their reputation, Morgan Stanley has indicated a potential rise in its closing price. As per the indication, it is said that HDFC’s target price would go to Rs 2,110 per share, ruffling a 26 percent increase.
Source – India Today
