Shares of mortgage financier Housing Development Finance Company (HDFC) Ltd stopped trading on July 12, ending its 45-year-long journey on bourses.
All the existing futures and options contracts of HDFC Ltd also expired on Wednesday.
On Wednesday, which was the last day for trading, shares of HDFC Ltd closed at Rs 2,729.95 apiece, down 0.62 per cent, or Rs 17.05, on the BSE. HDFC Bank’s stock settled at Rs 1,633 apiece, down 0.95 per cent, or Rs 15.65.
From Thursday, shares of the merged entity will be trading on stock exchanges. HDFC Ltd had a market capitalisation of Rs 5.05 lakh crore while HDFC Bank’s reported a valuation of Rs 9.13 lakh crore on Wednesday.
The merger of HDFC Ltd with HDFC Bank came into effect on July 1.
HDFC Ltd was set up by Deepak Parekh’s uncle HT Parekh in 1977. The home financer launched its initial public offering (IPO) in 1978, in which it offered 8.5 lakh shares to the public at a face value of Rs 100 each. The company has been among the largest wealth creators for long-term investors.
Last month, the boards of HDFC Twins fixed July 13 as the ‘Record Date’ for determining the shareholders of HDFC Ltd who would be allotted the shares of HDFC Bank. This implies that those holding shares of HDFC Ltd as of the record date of July 13 will get 42 shares of HDFC Bank for every 25 shares of HDFC Ltd.
Post-merger, HDFC Ltd stock will be replaced with LTIMindtree in the Nifty 50 index effective today. The stock will be replaced with Jindal Steel and Power in the Nifty 100, and with Mankind Pharma in the Nifty 500 index, NSE said in a release.
“On account of the HDFC Twin merger, key domestic indices will see some churning on July 12, 2023,” said Abhilash Pagaria, Head, Nuvama Alternative & Quantitative Research.
Major flow impact will be seen in Nifty Bank as HDFC Bank will see an upward weight revision to 29 per cent from 27 per cent currently, Pagaria said in a note on July 12. The merger of HDFC Ltd and HDFC Bank was announced in April last year. With the amalgamation, HDFC Bank will be 100 per cent owned by public shareholders and existing shareholders of HDFC Ltd will own 41 per cent stake in the bank. The foreign stake is around 8 per cent in HDFC bank and it is likely to increase.
According to a note by IIFL Alternative Research, on a merged basis, aggregated foreign holdings stand at around 60.5 per cent, translating into the foreign room of close to 18.26 per cent as of the end of June 2023 compared to 17.71 per cent at the end of March 2023 quarter.
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