Citigroup Inc, the owner of World’s largest Merchant Banking Enterprise has opted out of the ownership of HDFC (Housing Development Finance Corporation) making it largest share sell in Indian Market this year.. Its stake in HDFC was valued to be $1.9 billion.
The bank sold 145.3 million HDFC shares at 657.56 rupees each. The price represents a discount of about 6 percent to HDFCs closing price on Thursday, when Citi launched the process to sell its HDFC stake. Sources had said the bank had invited bids of between 630 rupees and 703.55 rupees a share. The shares were bought by a large number of global funds as well as some local financial institutions, sources with direct knowledge of the process said. Citi was the sole bookrunner, they said.
This follows a similar disinvestment by international investors including U.S. private equity firm Carlyle and Singapore state investor Temasek in recent weeks. The sales have coincided with a sharp rise in the share prices of Indian financial companies, which would be among the main beneficiaries of expected interest rate cuts by the Reserve Bank of India later in the year.
The BSE Sensex has risen about 16 percent so far this year. The sale of the HDFC stake is ‘ongoing capital planning efforts,’ Citi said in a statement. The deal puts Citi at the top of Indias equity capital market league table, according to Thomson Reuters data.