New Delhi: HDFC Bank and HDFC shares fell sharply on Friday amid reports that there could be significant fund outflow in the merged entity. Shares of HDFC Bank closed 5.90 per cent down at Rs 1,625.35 on the BSE. During the day, it fell 6 per cent to Rs 1,622.
HDFC shares closed at Rs 2,701.15, down 5.63 per cent. During the day, the stock fell 5.84 per cent to Rs 2,695. Heavy selling in index major HDFC twins also dragged down the benchmark indices. The 30-share BSE Sensex closed at 61,054.29, down 694.96 points or 1.13 per cent. The NSE Nifty closed 186.80 points, or 1.02 per cent, lower at 18,069.
Vinod Nair, Head of Research, Geojit Financial Services, said, “Indian markets were down on heavy selling in HDFC Twins on fears of fund outflows post merger.” The market valuation of HDFC Bank declined by Rs 56,228.1 crore to Rs 9,07,505.07 crore and that of HDFC declined by Rs 29,572.72 crore to Rs 4,95,541.41 crore.
“HDFC twins were underperforming markets due to massive profit-booking amid selling in US banking crisis and weak Wall Street cues. On the negative side, Nifty Bank declined 2.3 per cent on the news of HDFC merger. The twins could result in an outflow of USD 150 to 200 million, said Prashant Tapase, Senior VP (Research), Mehta Equities Ltd.
Aditya Gaggar, director at broking firm Progressive Shares, said MSCI intends to add HDFC Bank to the large-cap segment of the MSCI Global Standard index with an adjustment factor of 0.5 versus the market expectation of 1, meaning it will not Will see incremental inflow. Instead, it could result in an outflow of USD 150-200 million.