HDFC to transfer investments in unlisted companies to SPV

Housing Development Finance Corporation (HDFC), India's largest mortgage lender, is looking to rejig its investments in unlisted companies to capture their value. It will transfer shares of select securities to a special purpose vehicle (SPV) and bring in strategic investors in the SPV.

The combined market value of the such stocks is estimated to be Rs1,500-2,000 crore.

HDFC does not consider its investments in companies such as Lafarge, Chalet Hotels, IL&FS, IL&FS Education, Cams, National Stock Exchange (NSE), L&T Urban Infrastructure and Maruti Countrywide, as strategic to it business.

The plan for an SPV was announced to US investors at a meeting arranged by CLSA, the French investment bank, which has reported these plans in a recent research paper.

''The management expects the listing of HDFC Standard Life in the next 12 months, and the transfer of strategic stakes in non-subsidiaries and associate companies to a separate company, will help the group in unlocking value from investments made over the past 8-10 years,'' CLSA said.

HDFC vice-chairman and CEO Keki Mistry said the bank had a lot of unlisted investments which were not strategic to its business, the value of which was being shown at the original cost of acquisition. He added that when investors looked at HDFC, the value of these investments was not taken into consideration.