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Below is quote on HDFC Bank and HDFC Ltd Stock post merger By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"Amalgamation of HDFC Ltd into HDFC Bank is likely to impact the cost of funds of HDFC Bank as there is around Rs2.8tn of debt in the balance sheet of HDFC Ltd. The cost of debt is lower than the cost of deposit of HDFC Bank. Therefore, investors are expecting the cost of fund of HDFC bank to go up post merger. In 4QFY22 HDFC Bank reported slower NII growth and lower NIMs. The merger can reduce the NIMs further. In our view the bank is well equipped to handle the deposit mobilization prior to merger date. They are aggressive in branch opening too. We believe the stock price movement in momentary and the superior asset quality and lower provision is likely to keep the shareholders return intact. In mid run the stock can witness some pressure but in long run it may outperform the sector"

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