HDFC to raise Rs 3,114 cr via preferential allotment

Mumbai, May 25 | Updated: May 26 2007, 06:37am hrs
Housing Development Finance Corporation ((HDFC) will issue fresh capital amounting to 7.11% of its equity on a preferential basis to US-based Carlyle Group and Citigroup. This is aimed at raising Rs 3,114 crore for funding growth of its banking insurance subsidiaries.

After the issue, HDFCs total foreign holding will be 80.4%, up from the existing 78.9%. The board of directors of the corporation on Friday recommended that 1.8 crore equity shares of Rs. 10 each on a preferential basis be issued to these two investors.

The shares would be priced at Rs. 1,730 per equity share of Rs 10 each. This price represents a 6.9% premium over the average weekly closingboth high and lowof HDFC share prices during the past six months period.

After over 12 years, we have raised funds through selling equities (except an FCCB isue), which will give us the leverage to raise debt, said Keki Mistry, managing diector, HDFC. According to him, the corporation will not go in for another equity issue in the near future.

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The price represents a 6.9% premium
Carlyle will hold 5.6% in HDFC
Citigroup will maintain its holdings at 12.3%
The fund will be used for expansion in banking and insurance

We have to issue fresh shares to Citi to maintain its existing level of stakeholding at 12.3%,he said.

Carlyle Group, through CMP Asia Ltd, will subscribe to 1.525 crore shares and Citigroup Strategic Holdings Mauritius Ltd will buy the balance. After the issue Carlyle Group will hold 5.6% of equity in HDFC.