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20. 10/9/12 Merger Report of HDFC-CBOP by Atmakuri Rammohan
On the net interest margin front, HDFC Bank has a net interest margin of 4.3% while CBOP has an
NIM of 3.6%. The current and savings account (CASA) stands at 50.9% and 24.5% for HDFC Bank
and CBOP, respectively.
Talking about the NPAs, HDFC Bank has a very low NPA of 0.4% as against 1.69% for CBoP.
The capital adequacy for HDFC Bank stands at 13.8% as against 11.5% for CBoP. Analysts say the
merger will create a strong banking entity.
The earnings of HDFC bank in 2007is rs11414500000
The earnings of CBoP in 2007 is 1213800000
Number of shares of HDFC bank in 2007 is 319389608
Number of shares of CBoP in 2007 is1698989540
EPS of HDFC Bank in 2007 is rs 35.74 per share
EPS of CBoP in 2007 is rs 0.72 per share
The swap ratio for the merger is 1 share of HDFC bank for every 29 shares held by CBoP
Exchange Ratio=1 share of HDFC/29 shares of CBoP=0.03448
The total number of shares in the merged entity=319389608+(0.03448*1698989540)
=377975454 shares
EPS12=(11414500000+1213800000)/ 377975454=33.41
From the EPS analysis we can say that the target company CBoP gains and the acquiring company HDFC
losses. So there may be some synergy loss for the HDFC bank. In pre merger the EPS of CBoP is 0.72. After
Merger the EPS raise to 1.15 that is almost 160% for the Pre merger EPS. In pre merger the HDFC EPS is
35.74 per share. After merger the EPS for HDFC is falls to 33.41 per share. That’s why the share holders of
the HDFC bank do not have the interest for merging of CBoP in HDFC bank. The share holders of CBoP were
happier for this merger. Because of this merger proposal the share value of the CBoP has increased on that
day and the share price of the HDFC Bank has decreased.
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21. 10/9/12 Merger Report of HDFC-CBOP by Atmakuri Rammohan
------------------- in Rs. Cr. -------------------
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths
Total Share Capital 354.43 425.38 457.74
Equity Share Capital 354.43 425.38 457.74
Share Application Money 0 400.92 0
Preference Share Capital 0 0 0
Reserves 11,142.80 14,226.43 21,064.75
Revaluation Reserves 0 0 0
Net Worth 11,497.23 15,052.73 21,522.49
Deposits 100,768.60 142,811.58 167,404.44
Borrowings 4,478.86 2,685.84 12,915.69
105,247.46 145,497.42 180,320.13
Other Liabilities & Provisions 16,431.91 22,720.62 20,615.94
133,176.60 183,270.77 222,458.56
Cash & Balances with RBI 12,553.18 13,527.21 15,483.28
Balance with Banks, Money at
Call 2,225.16 3,979.41 14,459.11
Advances 63,426.90 98,883.05 125,830.59
Investments 49,393.54 58,817.55 58,607.62
Gross Block 2,386.99 3,956.63 4,707.97
Accumulated Depreciation 1,211.86 2,249.90 2,585.16
Net Block 1,175.13 1,706.73 2,122.81
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22. 10/9/12 Merger Report of HDFC-CBOP by Atmakuri Rammohan
Capital Work In Progress 0 0 0
Other Assets 4,402.69 6,356.83 5,955.15
4 133,176.60 183,270.78 222,458.56
Go BackComment
Contingent Liabilities 582,835.94 396,594.31 466,236.24
Link
Bills for collection 17,092.85 17,939.62 20,940.13
Embed Book Value (Rs) 324.38 344.44 470.19
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22 of 23
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Particulars 31-Mar-08 31-Mar-09 31-Mar-10
Tw eet
I. INCOME
0
Share Interest earned 1011500 1,633,226 1,617,290
Other income 228315 329,060 380,761
Total 1239815 1,962,286 1,998,051
II. EXPENDITURE
Interest expended 488712 891,110 778,630
Operating expenses 374562 553,281 576,448
Provisions and contingencies [includes provision 217523 293,402 348,103
for income tax and fringe benefit tax of
Rs. 382,73 lacs (previous year: Rs. 313,38 lacs)]
Total 1080797 1,737,793 1,703,181
III. PROFIT
Net profit for the year 159018 224,494 294,870
Profit brought forward 193203 257,463 345,557
Transfer from investment fluctuation reserve
Total 352221 481,957 640,427
IV. APPROPRIATIONS
Transfer to Statutory Reserve 39755 56,123 73,718
Proposed dividend 30127 42,538 54,929
Tax (including cess) on dividend 5120 7,229 9,123
Cess on dividend pertaining to previous year paid
during the year 6 59 93
Transfer to General Reserve 15902 22,449 29,487
Transfer to Capital Reserve - 9,387 19,946
Transfer to investment fluctuation reserve 3850 -1,386 -149
Balance carried over to Balance Sheet 257461 345,557 453,279
Total 352221 481,957 640,427
V. EARNINGS PER EQUITY SHARE
(Face value Rs. 10/- per share) 18 Rs. Rs.
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23. 10/9/12 Merger Report of HDFC-CBOP by Atmakuri Rammohan
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Search History:
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Result 00 of 00
00 results for result for
p.Basic 46.22 52.85 67.56
Diluted 45.59 52.59 66.87
Mar ' 08 Mar ' 09 Mar ‘10
EPS 44.87 52.77 64.42
DPS 8.5 10 12
Operating margin (%) 30.78 19.87 24.36
Gross profit margin (%) 28.58 18.05 22.39
Net profit margin (%) 12.82 11.35 14.76
ROCE 5.20 5.96 4.96
Post Merger results are satisfactory but merger is took in Long term prospective, Following are
few more benefits to HDFC
Access CBoP’s branches of CBoP and an increased presence in National Capital Region states
170 of to 394 branches lie in the North, concentrated in the southern and northern (NCR,
55), Punjab (78), Haryana (28); 150 of its branches are situated in the South, mainly in
Kerala (91).
Greater access to the North (Punjab and Haryana) as well as the South (particularly Kerala),
thereby strengthening its presence in those regions.
CBoP’s strong SME relationships will complement HDFC bias towards highly rated
corporates thus expanding HDFC’s base.
The creation of India’s 7th largest bank, just behind public giants like Bank of Ba roda, Bank
of India.
Induction of a strong and capable management team with extensive industry experience
and proven capabilities.
Due to an influx of 394 branches from CBoP, there will be a significant increase in the
number of branches for HDFC.
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24. 10/9/12 Merger Report of HDFC-CBOP by Atmakuri Rammohan
Merger Report of HDFC-CBOP by Atmakuri
Rammohan
In this report , complete overview of merger between HDFC&CBOP and effects of pre and post merger on
HDFC
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