919: What Does the Merger of HDFC, HDFC Bank Mean for the Financial Sector?

In a big announcement on Monday, 4 April, the board of HDFC Limited and HDFC Bank announced the biggest merger in Indian corporate history, with a combined balance sheet of a whopping Rs 17.87 trillion.

The merger, which is expected to conclude over the next 18 months, has been speculated for more than a decade and it was a question of when and not why.

And rightly so. This is the merger of two industry behemoths: HDFC Limited – India’s largest housing finance company with assets under management worth Rs 5.26 trillion – and HDFC Bank, one of India’s largest private sector banks with a market cap Rs 8.35 trillion. This merger will make the new entity the world’s fifth most valued bank.

HDFC Chairman Deepak Parekh said that the merger will not only strengthen the entity against its competitors but also make its offerings more competitive.

But the big question emerging from this announcement is its timing. Why now? What made 2022 an ideal time for this merger? And how will it impact the highly competitive financial services market?

We answer these questions in today’s episode with Ira Dugal, the Executive Editor of Bloomberg Quint.

Host and Producer: Himmat Shaligram
Editor: Shorbori Purkayastha

Music: Big Bang Fuzz

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