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Deepak Parekh Says Enough Takers For Citi Stake In HDFC

19 August, 2008

 

 

A week after surfaced that Citigroup might sell its stake in India’s largest housing mortgage company Housing Development Finance Corporation (HDFC), company chairman Deepak Parekh has been reported as saying that a number of foreign institutional investors (FIIs) are showing interest to buy Citi’s stake. While addressing HDFC shareholders at the AGM on Wednesday, Parekh is reported to have said: “Citi has taken a decision globally to sell its non-core assets. Now, whether its stake in HDFC is a core or non-core asset for them, we don’t know.”

He added that when he talked to Citigroup officials, they had replied in the negative on selling the stake. Parekh also added that Citi’s stake is valued at Rs 6,000 crore and if indeed Citi plans to sell its stake, HDFC would like to place with two or three institutions.

HDFC announced its first quarter results posting a 25 per cent rise in profits to Rs 468.11 crore as against Rs 373 crore in profits recorded in the same period last financial year.

Citigroup had picked up 9.27 per cent stake in HDFC for around $671 million in May 2006 from Standard Life, HDFC’s JV partner in in the its insurance business HDFC Standard Life. Citigroup had also picked up an additional 0.97 per cent stake in HDFC for about $117 million last year. These were issued at Rs 1,730 a share. Carlylye Group also has 5.6 per cent stake which it picked up with Citigroup in 2007 for $650 million. It may look to increase its holding now.

Citigroup is selling its assets in what it calls “re-engineering” of the business. The struggling US financial group is selling its German retail business to France’s Credit Mutuel for more than $8 billion. The bank is also planning to sell Citigroup Global Services Ltd, and its technology and infrastructure outsourcing arm Citos, which could fetch upto $800 million. CitiFinancial, its consumer finance non-banking finance company, is looking to sell around $1 billion of its portfolio, which includes a mix of commercial vehicle and construction equipment loans. Since the sub-prime crisis erupted last year, the group has posted write-downs around $40 billion. It is expected to add a further $8 billion in the second quarter results, which are to be announced tomorrow.

 


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Deepak Parekh Says Enough Takers For Citi Stake In HDFC

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