HDFC, NOW ONE OF THE TOP TEN IN THE WORLD! HDFC Bank is one of the largest private banks in India. It recently merged with another large financial institution, also called HDFC (Housing Development Finance Corporation).  The combined company is now a behemoth, ranked among the top ten bank holding companies in the world! This is not just a simple story of a merger and rankings. And, it is not entirely an Indian story. (1) HDFC Bank, unlike most other Indian banks, grew organically, by competing with large nationalized (government-owned and subsidized) banks. While many large Indian companies are “ promoted” by powerful founding shareholders who tend to be highly-connected rich oligarchs, HDFC Bank did not have influential promoters. It is mostly owned by public shareholders. Only a few other companies in India (like L&T and ICICI) have reportedly become large public companies in this way. (2) The other merger partner, “Housing Development Finance Corporation” is a different story. Nearly half of HDFC used to be owned by foreign banks and institutions, including Citigroup, JP Morgan and Carlyle (an American private equity firm.) Those holdings have been sold or diluted. (3) Finally, a merger of this magnitude is noteworthy in India. For many decades, the Indian government, politicians and media were against large enterprises, fearing that they would exploit customers and competitors. Those fears are gradually easing in recent years. India is beginning to realize that, to be competitive globally, size and scale do matter. (In an ironic role reversal, large mergers are now being blocked in Europe and America because of the same sweeping suspicions Indian government and media have had, that size and scale are inherently against general economic welfare and fairness.) Read More at : https://www.reuters.com/business/finance/indias-hdfc-bank-record-high-post-hdfc-merger-among-worlds-top-10-banks-by-value-2023-07-03/#:~:text

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1 Comment

  1. HDFC Bank is one of the largest private banks in India. It recently merged with another large financial institution, also called HDFC (Housing Development Finance Corporation).

    This is not just a simple story of a merger and rankings. And, it is not entirely an Indian story.

    (1) HDFC Bank, unlike most other Indian banks, grew organically, by competing with large nationalized (government-owned and subsidized) banks.

    While many large Indian companies are “ promoted” by powerful founding shareholders who tend to be highly-connected rich oligarchs, HDFC Bank did not have influential promoters. It is mostly owned by public shareholders. Only a few other companies in India (like L&T and ICICI) have reportedly become large public companies in this way.

    (2) The other merger partner, “Housing Development Finance Corporation” is a different story. Nearly half of HDFC used to be owned by foreign banks and institutions, including Citigroup, JP Morgan and Carlyle (an American private equity firm.) Those holdings have been sold or diluted.

    (3) Finally, a merger of this magnitude is noteworthy in India. For many decades, the Indian government, politicians and media were against large enterprises, fearing that they would exploit customers and competitors. Those fears are gradually easing in recent years. India is beginning to realize that, to be competitive globally, size and scale do matter.

    (In an ironic role reversal, large mergers are now being blocked in Europe and America because of the same sweeping suspicions Indian government and media have had, that size and scale are inherently against general economic welfare and fairness.)

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