HDFC merger spurs bull run on bourses
Sensex revisits 60k, Nifty ends above 18,000; Heavy buying in HDFC twins led to short covering in the market; All BSE sectoral indices mustered gains; 179 stocks at 52-week highs
Sensex in lower top formation
HDFC Twins Lead Gains
- BSE Sensex gained 1,335.05 pts to 60,611.74
- NSE Nifty jumped 382.95 pts to 18,053.40
- HDFC Bank, HDFC led the Sensex gainers' chart, advancing 9.97%, 9.30% respectively
- HDFC twins contribute to 70% gain of Nifty
- Kotak Bank, HUL, L&T, IndusInd Bank, Sun Pharma and Tata Steel among gainers
- Only 2 names in the red - Infosys and Titan
Investor richer by Rs4.5 lakh cr; mcap at Rs272.46trn
Investors turned wealthier by more than Rs4.5 lakh crore on Monday as the domestic equity market rallied over two per cent on the proposed merger of HDFC Ltd with HDFC Bank. The market capitalisation (mcap) of BSE-listed companies, also an indicator of notional wealth of investors, surged to Rs2,72,46,213.62 crore. This marks a gain of Rs4,57,826.69 crore compared to the market valuation of Rs 2,67,88,386.93 crore at the close of trading on the BSE on Friday.
Mumbai; BSE Sensex vaulted 1,335 points, while NSE Nifty shot past the 18,000-mark on Monday, fuelled by index heavyweights HDFC twins, which soared almost 10 per cent after announcing corporate India's biggest merger. India's largest housing finance company HDFC Ltd will merge with the country's top private lender HDFC Bank to create a banking behemoth with a combined balance sheet of about Rs17.87 lakh crore. The announcement triggered robust buying in these two counters as well as other banking and financial stocks. FMCG, IT and metal stocks too saw heavy demand.
The 30-share BSE Sensex darted up 1,335.05 points or 2.25 per cent to close at an over two-month high of 60,611.74. Likewise, the broader NSE Nifty jumped 382.95 points or 2.17 per cent to 18,053.40.
HDFC Bank and HDFC led the Sensex gainers' chart, advancing 9.97 per cent and 9.30 per cent, respectively. The other gainers included Kotak Bank, HUL, L&T, IndusInd Bank, Sun Pharma and Tata Steel. Only two names closed in the red -- Infosys and Titan, slipping up to 1.05 per cent.
"The merger of HDFC with HDFC Bank is an unprecedented mega-merger which will benefit all stakeholders. The shareholders of both entities stand to benefit substantially, as already reflected by the sharp up moves in their stock prices. For shareholders, this is far better than a buyback at higher prices. This mega-merger will correct the recent underperformance of the HDFC twins. From the valuation perspective, the HDFC twins are even now only attractively priced in a highly valued market. The Indian economy will benefit from larger investment by the merged entity in large infra projects. India will have a large global bank," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
