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Unless the configuration rules are changed, nothing happens except that hdfcbank’s weight is increased proportionally to the current mkt cap(free float) formula.
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After the merger, similar to corporate litigation day, the stock will have a new price that takes into account the larger company.
As described here, the following will probably happen
3. What is Fractional Shares? (Zeroda.com)
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Today’s HDFC Twin and Nifty Bank’s Declines Could Be the Main Reason
The exchange is readjusting the weight calculation matrix so as not to affect the current value.
Ideally, banknifty, finnifty and nifty50 should be heavily impacted.
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In the N50 bcos, the hdfc twin is not a constituent stock, although it is if hdfc is not included in the other two indices.