HDFC Bank to buy Centurion for $2.4 bn

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Mumbai, February 25:: of $2.4 billion. There is some concern on that front," said R.K. Gupta, managing director at Taurus Mutual Fund. "Maybe they want to grow bigger before April 2009 so there's less possibility of becoming a takeover target when foreign banks come in."

Morgan Stanley said the deal would not significantly alter market share in lending, retail loans and deposits.

"From a longer-term perspective, it can be a good move as it increases HDFC Bank's physical distribution significantly," Morgan Stanley analysts wrote in a report, adding the deal would increase HDFC Bank's customer base by about 30 percent, to 13 million.

"However, in the near term, it's likely to act as an overhang on the stock," it said, noting Centurion was one of India's less profitable banks.