Citi to reduce its stake in India’s HDFC: sources

Citi to reduce its stake in India’s HDFC: sources

Mumbai: Citigroup has decided to reduce its stake in India’s top mortgage lender Housing Development Finance Corp to about 10% from 11.4% now via stock market deals, two sources with knowledge of the matter said on Monday.

The sales prospectus will be given to possible buyers later on Monday, the sources told Reuters, declining to be identified as the matter was not public yet. Citi will remain HDFC’s largest shareholder after the deal.

The sources said Citi’s decision to pare its stake in HDFC was triggered by the global accord on banking, known as Basel III, that discourages large holdings by banks in other financial institutions.

The stake to be sold by Citi is valued at about 1350 crore ($301 million), based on HDFC’s share price as of Monday. Shares in HDFC, which the market values at about $21 billion, closed at 657 rupees, up 0.8%.

A spokesman for Citi in India declined to comment, while officials at HDFC could not be immediately reached.

Citi bought just under 10% of HDFC in 2006 for about 2900 crore and has subsequently added to its stake, making it the mortgage lender’s top shareholder with a 11.37% stake, according to Thomson Reuters data.