HDFC Bank Ltd.’s stock declined after listing of new shares issued to Housing Development Finance Corp. investors as part of India’s biggest corporate merger.
Shares of the private lender opened 0.33% higher at Rs 1,650 apiece but pared gains to trade 0.33% lower at Rs 1,639 apiece as of 9:46 p.m. compared to a 0.12% rise in the benchmark NSE Nifty 50. The relative strength index was at 46.78
Of the 46 analysts tracking the company, 45 maintain a ‘buy’ rating and one recommends a ‘hold’, according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 22.1%.
HDFC Bank has become the fourth largest lender in the world by market value, according to a Bloomberg data. It’s now fully held by public with no promoter.
Following the merger, JSW Steel Ltd. replaced HDFC on the S&P BSE Sensex from July 13, and LTIMindtree Ltd. replaced it on the NSE Nifty 50.
HDFC Bank allotted over 311 crore fresh equity to shareholders of HDFC as of the July 13 record date.
The new shares will be on equal footing with existing shares of HDFC Bank, according to an exchange filing by the lender on Friday. A shareholder got 42 shares of HDFC Bank for every 25 held in HDFC.
This would increase the paid-up share capital of HDFC Bank from Rs 559.2 crore to Rs 753.8 crore, following the cancellation of the promoter’s holding of 116.4 crore shares.