Big merger Theory!

Introduction

The recent merger between HDFC Bank and its parent company, HDFC, has propelled HDFC Bank to become one of the world's top 10 banks by market capitalization. The combined entity now has a market capitalization of around 12.5 lakh crore, surpassing major global lenders such as Morgan Stanley and HSBC Holdings. And also merged IDFC First Bank, similar to HDFC Bank, will have no promoter entity and will be fully owned by institutional and public shareholders.

When a subsidiary company merges with its parent company, it is referred to as an "internal" or "vertical" merger. 

What will be the impact of this move?

Analysts view HDFC Bank's valuation as attractive and anticipate accelerated loan growth.

With the increased market capitalization and growth potential, this merger presents an intriguing opportunity for those interested in the banking sector.