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    HDFC Bank shares up 1% on RBI approval for merger with HDFC

    HDFC Bank shares up 1% on RBI approval for merger with HDFC

    HDFC Bank shares up 1% on RBI approval for merger with HDFC
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    By CNBCTV18.com  IST (Updated)

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    HDFC Bank share price: Shares of HDFC Bank rose as much as percent on Tuesday after the bank said that the Reserve Bank of India has issued a no-objection certificate with respect to its merger with HDFC Ltd. Post the approval, foreign brokerage firm CLSA said that the central bank’s approval is a big step towards the completion of the merger process. However, the approval came in subject to certain conditions.

    Shares of HDFC Bank rose as much as 1 percent on Tuesday after the Reserve Bank of India has a no-objection certificate with respect to the lender's merger with HDFC Ltd.
    At 9:16 am, shares of the bank were trading 0.7 percent lower at Rs 1,364.7 on the BSE.
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    “The scheme remains subject to various statutory and regulatory approvals inter alia including approvals from the Competition Commission of India, the National Company Law Tribunal, other applicable authorities and the respective shareholders and creditors of the companies involved in the Scheme, as may be required,” the lender said in an exchange filing.
    On Saturday, both stock exchanges — NSE and BSE — issued "no adverse observations" and "no objection" to the amalgamation scheme.
    On Monday, the bank said that advances aggregated to approximately Rs 13,950 billion as of June 2022, a growth of around 21.5 percent as of June 2021, and a growth of about 2 percent as of March 2022. Deposits grew 19 percent year-on-year and 3 percent quarter-on-quarter to Rs 16,050 billion as of June 2022.
    The bank’s CASA ratio stood at around 46 percent as of June 2022, as compared to 45.5 percent as of June 2021, and 48.2 percent as of March 2022.
    Meanwhile, during the quarter ended June 2022, HDFC assigned loans amounting to Rs 9,533 crore to HDFC Bank compared to Rs 5,489 crore in the corresponding quarter of the previous year. The transaction was part of the HDFC-HDFC Bank direct assignment route under the home loan arrangement.
    HDFC's gross income from dividends for the quarter ended June 2022, stood at Rs 687 crore. In the corresponding quarter last year, gross income from dividends was at Rs 16 crore.
    Dipan Mehta, Director, Elixir Equities, said that “I think that investors who have been in HDFC and HDFC Bank for many years, maybe decades also, and have generated so much of wealth by owning those stocks need to take this in their stride. End of the day, the merger will be synergistically very positive and it should lead to higher growth rates, and better margin management as well”.
    He thinks HDFC is a safe stock to own in a portfolio right through the ups and downs of the economy, through the IL&FS crisis, the pandemics and the wars. “We have seen both these companies do exceedingly well. So they provide a certain amount of stability in the portfolio. So I would say that all the short-term negatives notwithstanding both HDFC and HDFC Bank should be part of the core holdings of almost every portfolio,” Mehta added.
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