HDFC-HDFC Bank merger: LTIMindtree eyes Nifty entry as HDFC shares stop trading from July 13

LTIMindtree is a key contender to replace Housing Development Finance Corporation Ltd (HDFC) in the Nifty index, as the latter exits trading from stock exchanges from July 13. Calling it a high conviction possible entrant, Abhilash Pagaria, head at Nuvama Alternative & Quantitative Research expects LTIMindtree to attract $150-160 million inflows, if it is included in the elite Nifty club. .

The fresh development comes as HDFC's merger with HDFC Bank Ltd gets effective from July 1. The boards of HDFC Bank and HDFC will meet on June 30 post-market hours to clear and approve the merger, HDFC Chairman Deepak Parekh said adding that the HDFC twins had received all regulatory approvals.

"HDFC-HDFC Bank merger will be effective on July 1. Both companies are having separate board meetings on June 30 after office hours. It will be the last board meeting of HDFC," said Parekh. Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold.

HDFC Ltd will stop trading from July 13th and, as per Nuvama Alternative & Quantitative Research, LTI Mindtree (LTIM) continues to b a high conviction replacement in the Nifty Index. Pagaria said the adjustment in indices will take place immediately around ex-date of HDFC merger.

"We can expect Nifty Indices to official announce replacement within a day or two of official communication on exchanges of record date from HDFC Ltd," he said adding that preliminary calculations suggest LTIMindtree should see an inflow of roughly $150 million to $160 million.             

Termed as the biggest transaction in India's corporate history, HDFC Bank on April 4 last year agreed to take over the biggest domestic mortgage lender in a deal valued at about $40 billion, creating a financial services titan. The proposed entity will have a combined asset base of around Rs 18 lakh crore.

Meanwhile, Nuvama said Nifty indices rejig should also move to June 28 from June 29, as NSE revised the Bakri Id holiday to Thursday. 

"NSE has revised the trading holiday from June 28th to June 29th. Thus,  Nifty indices quarterly rejig (adjustment) should also move to June 28th (Wednesday) from June 29th (Thursday).  The official circular on rejig date revision is still awaited," Nuvama said. 

From July 1, all centres of HDFC Ltd will become HDFC Bank and smaller centres will also be used as service centres.

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