Kathmandu – The largest banking sector in India so far has been merged. The biggest bank is still big. The merger is in line with the policy put forward by the Government of India with the objective of giving more stability and boost to the financial sector.

According to the details, HDFC Limited and HDFC Bank have merged. It is said to be one of the biggest deals in corporate history in India. HDFC is mixed with HDFC.

The country’s largest bank is now even bigger. So much so that even the initial parent company has now joined the bank.

HDFC Bank is also India’s largest lender. Now it is merging with one of its partners, HDFC Bank. Some of that process is still pending.

The board of both companies has approved the merger. Each shareholder of HDFC will get 42 shares of HDFC Bank equal to its 25 shares. This is the largest such deal in Indian corporate history.

It is estimated that after the merger, HDFC Bank will overtake TSC, India’s second largest company.

The merger between the two companies was announced on Monday morning before the stock market opened. As soon as the trading opened, the market gave a big salute.

This is probably the first time that the shares of both the companies have risen by 13 and 14 percent simultaneously.

The beginning of HDFC

According to the news reports, the rise in the shares of the company had the effect that the whole market appeared in a festive mood. Both the Sensex and the Nifty closed higher.
The reason for such a market boom is also clear. HDFC, or Housing Development Finance Corporation Limited, is the promoter of HDFC Bank and its largest shareholder.

Now all the shares of HDFC Bank with HDFC Limited will be sold. Chairman of the group Deepak Parekh has also clarified that the company will no longer be a promoter and will be a fully public company.

That is, its shareholders will own it. HDFC was founded by ICICI. The underlying purpose was to enable as many people as possible to buy a home with a loan and start a large and well-organized home loan business.

ICICI was created with a grant from the Ford Foundation to promote industrial investment in the country.

However, after the Reserve Bank licensed the new bank in the 90’s, the two companies applied to open one bank each, and at the same time, both opened their own banks. This is also familiar to investors.

However, a few years later, in 2002, ICICI Bank decided to merge with its own bank. Since the size of the bank was only about one-third of that of the parent company, this decision raised many questions.
The logic was still clear. The bank had a banking license and both companies could maintain a good grip on general retail customers from large industries.

What happened as a result is in front of everyone. But, at the time of the merger of HDFC Company, no such question can arise now. Because, HDFC Bank has surpassed its parent company in many ways.

Not only has it become the largest bank in the country with an annual growth rate of over 25 percent, but it also has a good reputation among investors as its investors have earned a decent income. The price has also been given to the investors.

HDFC is no less than anyone in terms of revenue or rapid growth. Instead, many investment advisers have commented that HDFC has made good investments and even profits in the last two years.

The reason is that apart from the income earned by HDFC from its business, about 26 per cent of its holdings in HDFC Bank are also considered to be a major part of its revenue. In other words, he has been making a great contribution to the progress of the bank.

Many market experts have long speculated that the merger would benefit them.

The reason is that the bank receives a lot of money at very low interest rates through its current and savings accounts, which, if used for the flow of home loans, can be a very lucrative deal.

HDFC Bank has not yet given home loan. He used to send his clients to HDFC for this job i.e. he used to work as an agent.

Recently, the Reserve Bank has made some changes in the NPA rules of banks and non-banking companies. After that, there is no difference between the two accounting methods.

Aditya Puri, who has been pushing HDFC Bank to the pinnacle of banking in the country for 26 consecutive years at an annual rate of 26 percent, has raised questions over the bank’s business and future. However, this decision has answered all those questions.

Despite today’s strong uptrend, market experts see the problem. Prior to the merger, HDFC Bank’s share in the Nifty was above 8.5 percent and HDFC Bank’s share was less than 6 percent.

Together, they make up just over 14 percent. SEBI has now banned mutual funds from having more than 10 per cent stake in any one company. This simply means that more funds will have to sell these shares.

But, on the other hand, HDFC Bank will now have about 26 per cent stake in HDFC Bank. The shareholders of HDFC will get 42 shares of the bank for every 25 shares.

As a result, investors in HDFC shares will now hold about 41 percent of the bank’s equity. It can also change the maths of mutual funds.

At the same time, after setting the limit of foreign investment in any one share, there will be an opportunity for foreign institutions to buy some more. That is, there is a possibility of increase in shares due to the purchase of foreign investors.
However, looking at the share market, after becoming such a big bank, the bank’s customers and competing banks and housing loan companies may also face problems.

Even before the merger, HDFC Bank had the largest number of offices in the country, but the number of employees is less than that of State Bank of India. However, public sector banks also appear to be weakening in competition.

That is, now is the time to raise concerns for consumers as well as government bank employees and the Government of India.

There has been talk for a long time about merging all the small public sector banks to have a maximum of four large state-owned banks that can compete with private banks in the market.

But now is the time to act quickly. Because now this decision of HDFC will have to get the approval of CCI. And then the bank will have to solve its internal problems.

For this, from the top officials to the lower level employees, a blueprint for the future should be made and submitted.

Until now, both the companies have been making quick decisions according to the needs of the market, but now their large size has made it difficult to make quick decisions and implement them.

This huge bank should expect to find a way out of its difficulties soon. However, it also means that the competing banks and companies do not have much time to prepare.

The final merger of these organizations will be completed in 2024. HDFC has assets worth Rs 6.23 trillion. Similarly, 35 thousand 681 transactions are taking place. HDFC Bank’s total assets are worth Rs 19.38 lakh crore.