HDFC Merger: Why Did Two Strong Businesses Fail To Deliver Expected Returns?

HDFC and HDFC Bank were once among India’s most successful wealth creators, delivering stellar returns through splits, bonuses and fundraising. However, the merger of the mortgage lender with the banking giant has failed to meet investor expectations so far. Arun Kejriwal, Market Expert, explains why the combination has struggled to deliver the expected benefits and what may have gone wrong after the merger. The combination was widely seen as a natural fit, bringing together housing finance and banking under one entity. The discussion examines the post-merger performance, valuation concerns and whether the long-term growth story can regain momentum for investors.