HDFC Bank market cap crosses Rs 5-trillion mark first time

HDFC Bank saw its market capitalisation (market-cap) crossing Rs 5-trillion after the share price of the bank hit a new high on Thursday. The country’s private sector lender becoming the third firm after Reliance Industries (RIL) and Tata Consultancy Services (TCS) to achieve this milestone.

At 10:27 AM; HDFC Bank was rading 3% higher at Rs 1,949, have a market-cap of Rs 5.04 trillion, the BSE data shows. RIL was at number one rank with a market-cap of Rs 5.84 trillion, followed by TCS, which have market-cap of Rs 5.5 trillion.

In past four trading sessions, HDFC Bank has outperformed the market by gaining 4% after its parent company Housing Development Finance Corporation’s (HDFC) board approved fund raising worth Rs 130 billion through a combination of a preferential allotment and Qualified Institutions Placement (QIP).

"The key objective of raising capital is to participate in the preferential issue of HDFC Bank up to an amount not exceeding Rs 85 billion.

This would enable the Corporation to maintain its current shareholding in HDFC Bank," HDFC said in a press release.

HDFC too hit a new high of Rs 1,917, up 3%, extending its past one week’s 8% gain on BSE. The Corporation has market-cap of Rs 3.05 trillion, the exchange data shows.

HDFC Bank is schedule to announce the unaudited financial results for the quarter ending 31st December, 2017 (Q3FY18) on Friday, January 19, 2017.

Emkay Global Financial Services expect HDFC Bank to report extremely robust loan growth rate in high 20s, given the weak loan base the bank had in Q3FY17 (0.1% qoq).

“We expect an operationally stable quarter with stable net interest margins (NIMs) and cost-income ratio, However, asset quality is likely to include the steel account as non-performing assets or NPA (which was reported standard in Q2FY18), the net NPAs should remain stable due to high upfront provisions HDFC Bank had already taken in Q2FY18,” the brokerage firm said in a Q3FY18 results preview.

“HDFC bank is likely to continue its stable earnings trajectory led by all operating parameters. Loan growth should be strong at 25‐26% as NRI deposit linked loan saw outflow in Q3FY17 making base more favourable. Opex should be slightly up mainly from non‐staff, while fees to be in‐line with balance sheet growth,” the brokerage firm Prabhudas Lilladher said in results preview.