HDFC Bank’s merger marks a milestone for India

OUTSIDE INDIA,HDFCHDFCHSBCHDFC the union of two entities that share a banal acronym in their name might seem an exercise in bureaucracy. But in the case of the acquisition of Housing Development Finance Corporation () by Bank, announced on April 4th, that appearance would be deceptive. The size of the deal, at $60bn, is by far the biggest in India—triple the value of the next largest acquisition (Walmart’s purchase of Flipkart for $17bn in 2018). It is also the fourth-biggest banking transaction in the world ever, according to Refinitiv, a data provider. The resulting entity is estimated to have a market capitalisation of as much as $185bn, which would make it one of the world’s largest banks, after JPMorgan Chase, Bank of America and three Chinese lenders—and well above Citigroup, and Standard Chartered, the three global banks that once stood at the pinnacle of Indian private-sector finance.As important as the scale of the deal is what it says about the evolution of finance in India. Both institutions are among the most successful private-sector financial firms in a country where state-owned banks still loom large (local lenders were nationalised by Indira Gandhi, then India’s prime minister, in 1969). was founded in 1977 to provide basic housing finance. In the ensuing 45 years it has financed the purchase of 9m homes.