HDFC Bank has announced a merger with HDFC Ltd
What does it mean for the banking system and the shareholders of both companies?
A thread🧵explaining the pros and cons of the merger.
Hit "Retweet" to educate maximum investors
Lets go👇
(1/19)
What is happening?
HDFC Bank will take over HDFC Ltd....effectively making a huge bank
25 shares of HDFC ltd will receive 42 shares of HDFC Bank.
(2/19)
Potential to be India's largest Bank?
HDFC Bank+HDFC total size=18 lakh crores
SBI total size=26.5 lakh crores
With steady loan growth over the next 5 years....surely HDFC Bank will become the largest bank
(3/19)
Housing Finance is a big opportunity and the missing puzzle in the HDFC Bank armor:-
Over the past year ICICI scored big time on HDFC Bank due to rapid growth on home loans.
ICICI clocked up about 24% loan growth while HDFC Bank did not have a home loan portfolio.
(4/19)
So why merge now?
The regulatory arbitrage b/w Banks and NBFCs is slipping away:-
The IL&FS crisis hit the economy really hard.
Since then the RBI has taken various steps in NBFCs:-
1. Asset classification norms for NBFCs have been moved at par with that of banks.
(5/19)
