Perhaps its the size of HDFC Bank which is the limiting factor here. (in terms of market capitalisation)
It is already the 4th largest bank in world by market cap. (after merger with HDFC Ltd)
The 4 largest Chinese banks each have 15-20x assets of HDFC Bank and 15-20x net worth. Even if I assume HDFC merger is not reflected properly in net worth on the above site, their net worth and assets are still 10x of HDFC, and yet they have same market capitalisation. (But they are PSUs).
According to me, it seems like the sheer size of HDFC Bank is very large. Perhaps the market is pricing slower growth for HDFC Bank in future, perhaps NIM contraction or higher NPAs or something done by government to ensure that 1 or 2 private banks dont capture the whole market?
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