FIIs queuing up for Citi's HDFC stake; HDFC says Citi not selling

17 July 2008

Mumbai: The notion of buying in to India's premier housing finance institution, HDFC, seems to be exciting foreign institutional investors. In less than a week after reports appeared in the media suggesting that Citi may exit its holding in HDFC, chairman Deepak Parekh has admitted to receiving calls from a number of foreign institutional investors (FIIs) who have shown interest in acquiring Citi's stake.

Parekh said that HDFC was unaware of any plan Citi may have to offload its stake, basis their latest discussions, saying that he was not aware whether Citi treated its' stake in HDFC as ''core'' or ''non-core''.

Globally, Citi has decided to offload a number of its non-core assets, choosing to focus on a much smaller portfolio, and may even exit certain countries where its presence is not substantial.

However, a few days ago Citi had issued a clarification that its business in India was ''robust'', while quelling rumours that it would sell its tower in suburban Mumbai's corporate district, the Bandra Kurla Complex, to raise much needed cash.

Citi has an 11.74-per cent holding in HDFC, which Parekh estimated to be valued at around Rs6,000 crore. He was speaking to shareholders at the HDFC annual general meeting.

A report in the UK's Sunday Times had first said, ''The bank's German operation has already been put up for sale in a move expected to raise about €6 billion (£4.8 billion), and it is understood Citi may also sell its $2 billion stake in Indian bank HDFC.''