Citigroup garners Rs1061cr from HDFC stake sale
15 Jun 2011
Citigroup has earned a pre-tax profit of $160 million (Rs1,061 crore) by selling 1.5 per cent of its stake in Housing Development Finance Corporation (HDFC). The foreign bank pared its holding in the housing finance company from 11.4 per cent to 9.9 per cent in order to meet upcoming Basel III norms.
Citigroup sold 1.65 crore shares for Rs643 each. Citi's remaining 9.9 per cent stake in HDFC is valued at around Rs9,410 crore.
''This transaction was motivated by our capital planning, as we prepare for the implementation of Basel III, rather than strategic considerations,'' John Gerspach, chief financial officer, Citigroup, said in a statement.
Citigroup clarified it had no immediate plans to sell its remaining 9.9 per cent stake in HDFC, where it continues to remain the single largest institutional shareholder.
''Citi has categorically told us it does not intend to sell its remaining stake in HDFC immediately. Though there are some temporary concerns over India's economic growth because of high inflation, India is still an attractive investment destination for overseas institutional investors,'' Keki Mistry, vice chairman and chief executive officer, HDFC, said in a statement.
Citigroup, an investor in HDFC since 2005, held 11.4 per cent stake in India's largest mortgage lender through Citigroup Strategic Holdings Mauritius and Citigroup Holdings Mauritius.