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Shares of HDFC twins -- HDFC Bank and HDFC -- erased all the gains it had seen after the announcement of the merger.

In a major development on Monday, housing loan firm Housing Development Finance Corporation (HDFC) on Monday approved the merger of its wholly-owned subsidiaries HDFC Investments and HDFC Holdings with the HDFC Bank.

On the same day, both the shares rose nearly 10 per cent each.

From Tuesday to Thursday, they erased entire Monday's gains and reached the pre-merger levels.

"We believe the fall is temporary due to profit-booking given that there was a sharp spike in share price," said Vinit Bolinjkar, Head of Research at Ventura Securities.

"Also, the street is now getting into numbers over story and is nervous about whether RBI will provide approval, timeline of the merger etc.," Bolinjkar added.

On Thursday, the shares of HDFC Bank and HDFC settled 1.9 per cent and 2.8 per cent lower from their previous close, respectively.