HDFC to invest Rs 4,000 cr in HDFC Bank

Written by Agencies | Mumbai, February 29: | Updated: Feb 29 2008, 17:52pm hrs
Housing Development Finance Corporation will invest over Rs 4,000 crore in HDFC Bank to maintain its shareholding in the leading private sector lender, following its proposed merger with the Centurion Bank of Punjab.

The board of directors of HDFC Bank had earlier said that in the event of the merger with Centurion Bank of Punjab, it would consider making a preferential offer to its promoter, Housing Development Finance Corporation Ltd, to enable HDFC to maintain its shareholding percentage in the bank.

HDFC Bank proposes to issue 2,62,00,220 equity shares and and other securities at Rs 1530.13 to its promoter group, Housing Development Finance Corporation Ltd, HDFC Investments Ltd, HDFC Holdings Ltd and Home Loan Services India Private Ltd on preferential basis, the bank said in a filing to BSE.

For the quarter ended December 31, the promoters hold 23.28 per cent stake.

On February 23, HDFC Bank and Centurion Bank of Punjab had agreed, in principle, to merge to create the country's largest private sector financial institution in terms of branch network.

The preferential allotment would be pursuant to the SEBI guidelines and would be subject to approvals of shareholders, Reserve Bank of India and other regulatory authorities.

The Board of Directors at its meeting yesterday approved the draft scheme of amalgamation and the merger agreement and reaffirmed the share swap ratio and the issuance of one equity share of Rs 10 each of the HDFC Bank for every 29 equity shares of Re 1 each held in Centurion Bank of Punjab Ltd.

An extraordinary general meeting of the shareholders of the HDFC Bank would be held on March 27, to consider the above matters.