Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Chinese central bank PBOC increases stake in HDFC to above 1%
BackBack

Chinese central bank PBOC increases stake in HDFC to above 1%

HDFC informs exchanges about the People’s Bank of China raising its stake from 0.8% to 1.01%
  • The stake comprises 17.49 million shares of the mortgage lender
  • Photo: Pradeep Gaur/MintPremium
    Photo: Pradeep Gaur/Mint

    NEW DELHI : China’s central bank raised its stake in Housing Development Finance Corp. Ltd, the country’s largest mortgage lender told stock exchanges.

    People’s Bank of China (PBOC) raised its stake to 1.01% from 0.8%, HDFC said. The stake comprises 17.49 million shares of the mortgage lender.

    There is no law barring investments by the Chinese central bank in any Indian entity. Besides, it was a secondary market transaction and HDFC, thus, had no role in the deal. The lender wasn’t required by law to disclose the Chinese central bank’s 0.8% stake in it but with the 1% threshold breached, it has complied with regulations by informing the stock exchanges.

    Sovereign-backed institutions such as Temasek and Abu Dhabi Investment Authority are big investors in Indian markets, holding significant stakes in Indian companies.

    Central banks themselves, highly regulated as they are, also buy bonds of highly rated companies in other countries but taking an equity stake is unusual.

    The PBOC, however, holds stakes in companies across the world, including in energy giants such as BP Plc and Royal Dutch Shell Plc, data compiled by Bloomberg showed.

    Shares of HDFC rose 9.2% to 1,701.95 on BSE, while the benchmark Sensex closed 4.2% higher at 31,159.62 on Thursday. According to HDFC’s closing price on BSE on Thursday, the Chinese central bank’s stake is worth 2,976 crore. Stock exchanges were closed for trading on 10 April on account of Good Friday.

    HDFC’s shares plunged 25% last month amid a brutal selloff in global markets on concerns about the spreading coronavirus pandemic.

    “The stock is fairly priced now after the correction.It may be right to raise stake in HDFC," said Chokkalingam G, founder of Equinomics Research & Advisory Pvt. Ltd in Mumbai. “In the short-to-medium term, though, it may be painful as the wealth erosion due to the outbreak means that the home-loan companies will take long to return to normal growth."

    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
    More Less
    Published: 12 Apr 2020, 11:28 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App

    Chat with MintGenie