SBI Buys Over 1% Equity Stake In DFHI From IDBI

Mumbai, February 27: | Updated: Feb 28 2003, 05:30am hrs
The State Bank of India (SBI) has bought 24,94,850 equity shares in Discount and Finance House of India Ltd (DFHI) from Industrial Development Bank of India (IDBI) for Rs 315 per share.

SBI bought the shares, with face value of Rs 100 per share, through a negotiated offer. The transaction constituted over one per cent of the paid-up capital of DFHI.

This is seen as a part of SBIs plan to hike its stake in DFHI to 51 per cent. Before the transaction took place, SBI held a 29.05 per cent stake in DFHI. Post-transaction, SBIs holding may well be over 41 per cent, sources said.

IDBI held 12.40 per cent in DFHI before the transcation took place. An IDBI official has indicated that the financial instituion has, through this sale, offloaded its total holding in DFHI. SBI has been planning to consolidate its position in the primary dealership (PD) market by raising its stake in DFHI and divesting stake in Securities Trading Corporation of India Ltd (STCI). It has already sounded out other shareholders in STCI to offload their stakes.

It is also learnt that this could well be part of SBIs larger gameplan to merge its own PD arm SBI Gilts with DFHI somewhere down the line. This would be a logical thing for SBI to consolidate rather than hold small stakes in different places, a source said.