Mumbai: With the market capitalisation of ICICI Bank crossing ₹8 lakh crore for the first time on Monday, the gap in market value between the two major private sector lenders, HDFC and ICICI, has nearly halved since July.Following the merger of HDFC and HDFC Bank on July 24 last year, HDFC Bank's market-cap was 82% higher than ICICI Bank. ICICI Bank was valued at ₹6.94 lakh crore then while HDFC Bank's market- cap stood at ₹12.66 lakh crore. On Monday, this gap was reduced to 41%, with HDFC valued at ₹11.49 lakh crore and ICICI Bank at ₹8.14 lakh crore.HDFC Bank shares have been under pressure of late on account of squeeze in margins after the merger. In contrast, ICICI Bank has been an outperformer on account of stronger growth. ICICI shares rallied by 28% in the past six months, compared to HDFC Bank's 4.52%.Analysts expect ICICI shares' outperformance to continue in the near term though HDFC's valuations have turned cheaper.109708136"While some aspects may be strenuous for the banking sector, ICICI Bank may hold against the tide with steady earnings," said Prakhar Agarwal, analyst at Elara Securities. "With merger-related uncertainties for HDFC and recent embargo on Kotak Bank, ICICI Bank is a clean play on best-in class-return on assets and should trade at a premium on high-quality earnings."
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