Impact of Mergers and Acquisitions on Shareholder Value of HDFC Bank and HDFC Ltd Merge

The landscape of corporate growth and competitiveness has increasingly been shaped by mergers and acquisitions (M&A), particularly in industries undergoing consolidation and regulatory changes. In India’s financial services sector, the 2022 merger between HDFC Bank and HDFC Ltd marked a pivotal event, combining the country’s largest private sector bank with its largest housing finance company. Touted as one of the largest mergers in Indian corporate history, the deal was expected to create a financial behemoth capable of leveraging complementary strengths across banking and housing finance. This study investigates the impact of the HDFC Bank and HDFC Ltd merger on shareholder value, using an empirical framework focused on market reactions and post-merger financial performance. The primary objectives of this research are fourfold: (1) To assess the immediate stock market reaction to the merger announcement through an event study methodology; (2) To analyse the financial performance and changes in shareholder value before and after the merger; (3) To understand the strategic motivations and potential synergies driving the merger; and (4) To derive lessons and recommendations for corporate managers, investors, and policymakers regarding future mergers and acquisitions in the Indian financial sector.