HDFC Bank, HDFC Tumble Nearly 6%; Combined Mcap Falls By Rs 85k Cr

New Delhi: Shares of HDFC Bank and HDFC fell sharply on Friday amid reports that the merged entity could see significant fund outflow. The stock of HDFC Bank tumbled 5.90 per cent to settle at Rs 1,625.35 on the BSE. During the day, it fell 6 per cent to Rs 1,622.

HDFC shares declined by 5.63 per cent to end at Rs 2,701.15. During the day, the stock plunged 5.84 per cent to Rs 2,695. Heavy sell-off in index major HDFC twins also dragged down the benchmark indices. The 30-share BSE Sensex ended 694.96 points or 1.13 per cent lower at 61,054.29. The NSE Nifty fell 186.80 points or 1.02 per cent to settle at 18,069.

"The Indian market was dragged down by heavy selling in HDFC twins on fears of post-merger fund outflow," said Vinod Nair, Head of Research at Geojit Financial Services. The market valuation of HDFC Bank fell 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.

"Markets were under a bear hug on the back of massive profit-taking amid sell-off in HDFC twins, US banking woes and weak Wall Street cues. The negative takeaway was that Nifty Bank tumbled 2.3 per cent on reports that the merger of HDFC twins may result in outflows of USD 150 to 200 million," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Aditya Gaggar, Director of broking firm Progressive Shares said, the MSCI intends to add HDFC Bank to the large-cap segment of MSCI Global Standard Indexes, with an adjustment factor of 0.5 vs the market expectation of 1 which would mean that it would see no incremental inflows. "Rather, it may result in outflows of USD 150-200 million. (It would have resulted in an incremental inflow of around USD 3 billion had the adjustment factor been at 1)," Gaggar said.