The HDFC Bank stock fell 3.07 per cent to Rs 1,605.55 apiece on the BSE while the HDFC Ltd scrip declined 2.41 per cent to Rs 2,614.40 per share during the early deals on Tuesday.

A day after rallying over 9 per cent, the shares of private sector lender HDFC Bank and mortgage lender Housing Development Finance Corporation (HDFC) slipped up to 3 per cent lower in the morning

Both the stocks had surged on Monday following the announcement of their merger with HDFC skyrocketing 19.64 per cent on NSE in intraday trade on Monday. 

It eventually settled at Rs 2678.90, up 9.30 per cent on the BSE and at Rs 2,676.00, up 9.12 per cent on NSE. 

Vice President and Head of Research at Share India Securities said, “HDFC stock rose almost 19 per cent and HDFC Bank jumped around 14 per cent yesterday. 

he noted that “HDFC Bank is showing a bullish trend on major momentum indicators like RSI, MACD, Williams and 200 DMA. 

The surge in volume and a breakout above it’s strong resistance of Rs 1,525 levels has confirmed the bullish formation in the counter. HDFC Bank may touch the levels of Rs 1,850 in near future.” 

Nair said that it will take around 12-18 months for the merger to be completed and it needs to be seen how this develops going ahead with securing all the approvals. 

He added that both the companies will have to look into the cross-holdings in their subsidiaries such as HDFC Life where the merger may increase the holding of the entity beyond the IRDAI norms. 

he noted that the valuation of the group is very cheap and on a 5-year average it makes sense to be invested in the group.