A scorching rally lures HDFC Financial institution to do extra fairness offers

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A hot stock market in India prompts HDFC Bank Ltd. to join the promotion as companies reach record levels of funding.

The government flooded the market with money in response to one of the world’s worst coronavirus outbreaks, brought stocks to staggering levels and helped companies increase capital buffers. Although HDFC Bank is India’s most valuable lender, it has so far not been able to use its strong balance sheet to penetrate this highly competitive market.

“We’re going to do whatever we can to get there – hire more people, grow more people from within and even partner up,” said Rakesh Singh, group leader for investment banking, private banking, marketing and products at HDFC Bank, all rolled into one Interview. “As we build our distribution network, we will have a greater share of the stock market business.”

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For a relatively late starter like HDFC Bank, it may be easier said than done to capture larger market share as they grapple with uncertainty about the quality of their assets. The country’s second largest lender has to deal with experienced local players such as ICICI Bank Ltd., Axis Bank Ltd. and the State Bank of India measure.

HDFC Bank has lagged in recent years as it has focused on its fast growing core business of loans and deposits rather than investment banking. The Mumbai-based company was ranked 16th in its overall stock trading business last year, and 29th in 2019, according to Bloomberg.

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“It’s a predatory market where big companies prefer to work with dominant and well-established bankers with existing relationships who can offer them the best prices,” said Siddharth Purohit, analyst at SMC Global Securities Ltd. “Unless HDFC Bank is offering something very attractive, it will not be easy for them to expand this business quickly and receive the big ticket offers.”

India’s stocks have extended their surge, reflecting investor optimism that the economy will rebound strongly from the devastation caused by the coronavirus. The benchmark index rose 0.7 percent on Monday, almost reaching its record high in February.

Companies have raised £ 789 billion ($ 10.9 billion) through the stock markets so far this year, up 9.3 percent year over year, according to Bloomberg. That’s after an unprecedented £ 2.2 trillion in deals in 2020.