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Housing Development Finance Corp (HDFC) and HDFC Bank shares - widely known as the HDFC twins - saw their biggest intraday gains in 13 years amid large volumes on Monday after the companies announced a merger. The proposed merger, subject to shareholder and regulatory nods, will create one of the biggest banks in the world, the HDFC group companies said.

HDFC shares rose 9.3 percent for the day to settle at Rs 2,678.9 and the HDFC Bank stock zoomed 10 percent to finish at Rs 1,656.5. During the session, both stocks hit their upper circuits, with HDFC reaching as high as Rs 2,855.4 and HDFC Bank Rs 1,721.9.

Being heavyweights in headline indices, both stocks were the biggest contributors to the surge in the Sensex and Nifty50.

Under the scheme of amalgamation, shareholders will get 42 shares in HDFC Bank for every 25 shares held in HDFC.

The merger will turn the companies into a full-stack financial services conglomerate, which will be a "win-win for all stakeholders", HDFC Bank said in a regulatory filing.

HDFC currently holds around 21 percent in HDFC Bank.

HDFC CEO Keki Mistry said on a call with investors that HDFC and HDFC Bank will continue to operate independently till the effective date. He also said customers will be the biggest beneficiary of the merger. There is potential for seven percent more room for foreign institutional investors (FPIs) after the transaction, he said.

Mistry also said the job of each and every employee of HDFC will be retained.

HDFC Chairman Deepak Parekh called the transaction a "merger of equals". He believes the housing finance business is poised to grow in leaps and bounds.

HDFC-HDFC Bank Merger | We believe that the housing finance business is poised to grow in leaps and bounds, says HDFC Chairman, Deepak Parekh#HDFC #HDFCBank pic.twitter.com/cAMOBgDaAO

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In a business update for the quarter ended March 2022, HDFC Bank reported a 16.8 percent year-on-year increase in deposits to Rs 15.59 lakh crore. Its advances rose 20.8 percent on year to Rs 13.7 lakh crore. the lender also said its CASA Ratio hit an all-time high of 48.2 percent.

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(Edited by : Sandeep Singh)

First Published:Apr 4, 2022 9:28 AM IST