Mumbai: Shares of Housing Development Finance Corp. Ltd (HDFC) fell over 5% on Friday amid reports that US private equity firm Carlyle Group LP sold its 3.7% stake in the company to raise as much as $861 million.
Carlyle Group LP has raised $841 million in India’s fourth-biggest equity deal this year by selling its remaining 3.7% stake in HDFC, said a source with direct knowledge of the deal.
The sale marks the US private equity firm’s exit from HDFC after nearly doubling its original 2007 investment of $650 million with this latest sale and one in February that raised $270 million.
The HDFC stock ended 4.89% down to Rs.749.65 on BSE, while the Sensex lost 0.63% to 18,938.46 points in Mumbai on Friday.
Carlyle sold 57 million HDFC shares at Rs.761.42 each, said the source, declining to be named as details of the deal have not yet been released. The sale price represents a discount of 3.5% to HDFC’s Thursday close.
Buyers of the HDFC shares included a clutch of overseas and Indian institutional investors, the source said, declining to give details.
Officials from both Carlyle and HDFC declined to comment on the deal.
Carlyle, which had raised about $270 million in February by selling a quarter of its stake in HDFC, launched the latest stake sale on Thursday in a price band of Rs.760 to Rs.781.25 a share.
Citigroup is the sole bookrunner for the deal.
The HDFC share sale came after a slew of such transactions in the Indian market since the beginning of 2012 as investors took advantage of stock market gains to reduce their holdings or take profit out of their India portfolio companies.
India’s benchmark stock market index is up nearly 23% so far this year.
The index dropped nearly 25% in 2011, making it one of the worst global performers and leaving few options for private equity firms to exit their portfolio companies through IPOs or block deals.