HDFC AND HDFC BANK SHARES RISE

Shares of HDFC and HDFC Bank took the spotlight on Tuesday and ended in positive territory after announcing that their merger would be effective from July 1st.

HDFC stock rose 1.59 percent to settle at $2,762.50 apiece on BSE. During the day, it jumped 2.26 percent to INR 2,781.

Shares of HDFC Bank advanced 1.38 per cent to end at Rs 1,658 apiece after gaining 2.23 per cent to Rs 1,672 on the day.

HDFC Chairman Dipak Parekh said on Tuesday that the merger of major housing finance company HDFC with HDFC Bank, the country's largest private bank, will be effective from July 1.

Parekh told reporters in Mumbai that the boards of directors of HDFC and the private bank will meet on June 30 to clear and approve the merger.

HDFC Vice Chairman and CEO Kiki Mistry said the delisting of the company's shares will become effective from July 13.

• Also read: Consolidation. NCLT agrees to merge HDFC with HDFC Bank

HDFC Bank, billed as the largest deal in India's corporate history, on April 4 last year agreed to acquire the largest domestic mortgage lender in a deal valued at nearly $40 billion, creating a financial services giant.

The proposed entity will have a combined asset base of around INR 18,000 crore.

"The local market has rebounded, mainly supported by banking and finance stocks, which have received a boost from HDFC's merger updates," said Vinod Nair, Head of Research at Geojit Financial Services.

BSE Sensex, which includes 30 shares, jumped 446.03 points, or 0.71 percent, to settle at 63,416.03 points. The NSE Nifty Index rose by 126.20 points, or 0.68 percent, to close at 18,817.40 points.

• Also read: Acquisition. HDFC Credila: A unique deal for the HDFC Group

"Domestic stocks witnessed an upward movement led by large-scale buying. The HDFC twins have instilled strength after the company announced that the merger will be effective from July 1," said Siddhartha Kimka, Head of Retail Research at Motilal Oswal Financial Services Limited.