I don’t think the market fully appreciates the positives of the HDFC Bank-HDFC merger: Keki Mistry

The market has not fully appreciated the benefits of a proposed merger between Housing Development Finance Corp. and HDFC Bank Ltd., according to Keki Mistry.

“Normally what I hear from a lot of investors is that when a merger is announced and until all the regulatory approvals are in place, there tends to be a little bit of caution,” said the vice president and chief executive of the mortgage lender. Bloomberg Quint in an interview.

Once all legal approvals for the HDFC merger are obtained, Mistry expects market expectations to improve. All approvals, including the one from the National Company Law Tribunal, are expected to be achieved within 12-15 months, she said.

HDFC and HDFC Bank announced on April 4 their intention to merge into one entity with a balance sheet of nearly Rs 18 lakh crore. That caused HDFC’s share price to drop 20% in two weeks from Rs 2,679 each.

HDFC on May 2 declared its fourth quarter results. The company reported a 16% year-over-year net profit, helped by higher loan growth. HDFC reported assets under management worth Rs 6.54 lakh crore as of March, up 15% from a year earlier. On an AUM basis, growth in HDFC’s individual loan book was 17% year over year. The individual loan represented 79% of the total book.

On May 2, its share price was Rs 2,262.70 each.

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