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HDFC Bank shares continued to fall for the sixth session in a row on Tuesday, more than a week after the country's largest lender by market value announced a merger with Housing Development Finance Corp (HDFC).

The HDFC Bank stock declined 0.2 percent to end at Rs 1,493.3 apiece on BSE. HDFC shares, however, eked out a gain of 0.1 percent to settle at Rs 2,426.2 apiece, snapping a five-day losing streak.

The news of the proposed merger, announced on April 4, had triggered the biggest intraday spike in both stocks - widely known as the HDFC twins - in 13 years, but the stocks have been declining since.

HDFC currently holds around 21 percent of HDFC Bank. The amalgamation between HDFC and HDFC Bank is subject to shareholder and regulatory approvals.

The proposed all-stock deal, wherein shareholders will get 42 shares in HDFC Bank for every 25 shares held in HDFC, will likely create one of the world's largest lenders.

Fitch Ratings said on Tuesday that the proposed merger may have long-term implications for the country’s banking and non-bank financial institution (NBFI) sectors.

The ratings agency said the HDFC-HDFC Bank combine could redefine the competitive landscape for banks, and increase the prominence of mergers and acquisitions among banks seeking to close the market share gap with the merged entity.

Most stocks in the BFSI basket struggled below the flatline amid broad-based weakness in the market. Headline indices Sensex and Nifty50 finished lower for a second straight day.

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(Edited by : Sandeep Singh)

First Published:Apr 12, 2022 3:25 PM IST