Merger overhang to delay HDFC Bank's re-rating, caution analysts

From a long-term perspective, they see up to 40.4 per cent upside in HDFC Bank's stock as growth outlook remains intact

HDFC Bank Q2 review: Lack of clarity on regulatory approvals around HDFC Bank’s merger with HDFC will likely delay the lender’s re-rating, analysts said on Monday. While the management expects the merger to be completed earlier by Q1/Q2 of fiscal 2023-24, the stock’s up move may remain gradual, they said.

“Currently, a shareholders' meet is due on November 25, 2022, after which it may take up to another 7-8 months to complete the process. That said, clarity on the HDFC Life stake, and the merger structure from the RBI remains elusive,” said Anand Dama of Emkay Global, in a co-authored