Housing Development Finance Corporation Limited (HDFC)
will issue 1.8 crore equity shares of Rs10 each on a
preferential basis to a select group of investors, including
the Carlyle Group and the Citigroup. This represents
7.11 per cent of the total issued and paid-up capital
of the corporation.
board of directors of HDFC, at its meeting held on May
25, recommended the issue of 1.8 crore equity shares
to the Carlyle Group through CMP Asia Limited which
will subscribe to 1.525 crore shares and Citigroup Strategic
Holdings Mauritius Limited which will subscribe to the
balance of this issue.
preferential shares would be issued at a price of Rs1,730
per equity share of Rs10 each. This price represents
a 6.9 per cent premium over the average weekly high
and low closing share price of HDFC during the past
six months period.
the issue, Citigroup will maintain its holding at 12.3
per cent and The Carlyle Group will hold 5.6 per cent
of the equity of the corporation.
aggregate amount to be raised by the corporation through
the proposed preferential issue would be Rs3,114 crore.
The preferential allotment is in accordance with Chapter
XIII of the Securities and Exchange Board of India (Disclosure
and Investor Protection) Guidelines, 2000 and is subject
to shareholder approval at the ensuing annual general
meeting to be held on June 27, 2007.
loan approvals have grown consistently at 30 per cent
on a 10-year compounded annual growth rate basis. In
order to fund the growth of the mortgage business and
to fund the rapid expansion of HDFC''s associate and
subsidiary companies, namely HDFC Bank Limited (HDFC
Bank) and HDFC Standard Life Insurance Company Limited
(HDFC-SL), the corporation needs to raise additional
currently holds 21.56 per cent of HDFC Bank. In order
that HDFC as a promoter retains its shareholding in
HDFC Bank at approximately the current level, the board
of HDFC Bank, subject to the requisite approvals of
the Reserve Bank of India and its shareholders, has
made a preferential offer to HDFC at a price of Rs1,023.49
per share. This investment will ensure that HDFC maintains
its shareholding in HDFC Bank at 22 per cent post issue.
has recorded encouraging growth over the last few years.
HDFC''s shareholding in HDFC-SL is currently at 81.9
per cent. Over the next couple of years, HDFC would
have to continue to contribute its share of equity to
HDFC-SL to fund its growth. Investment in the equity
of HDFC-SL has a direct impact on HDFC''s capital ratios.
the preferential allotment of shares by HDFC will ensure
that it will meet its commitments to its subsidiary
and associate companies without impacting its core mortgage