KKR, Premji to invest in HDFC
Housing Development Finance Corporation (HDFC) — the country’s largest mortgage lender — will raise Rs. 11,104 crore from 10 marquee investors including GIC Singapore affiliate Waverly Pte. Ltd. and OMERS Administration Corporation, the administrator of the pension plan for Ontario’s municipal employees (OMERS), Canada.
The lender will issue 6.4 crore equity shares at a price of Rs. 1,726.05 per share on a preferential allotment basis to these investors. Some of the other investors are private equity firm KKR-backed Silverview Investments Pte. Ltd., Carmignac Group of France, Premji Invest represented through Azim Premji Trust. This will lead to a dilution to a dilution of 3.87% of the company’s equity base. The board of the lender has also approved raising of Rs. 1,896 crore through a qualified institutional placement.
HDFC Bank share issue
“The key objective of raising capital is to participate in the preferential issue of HDFC Bank up to an amount not exceeding Rs. 8,500 crore. This would enable the Corporation to maintain its current shareholding in HDFC Bank,” HDFC said in a statement.
Keki Mistry, vice chairman and managing director, HDFC Ltd. said in an interview to The Hindu last week that the lender was planning to foray into buying stressed real estate assets and also into the health insurance sector. HDFC is looking at inorganic possibilities to enter into the health insurance space.
In addition, the lender is also scouting for an acquisition in the mortgage financing space. All these would require capital.
“The Corporation is also exploring inorganic opportunities in the health insurance sector in conjunction with its subsidiary, HDFC ERGO General Insurance Company Limited and is evaluating opportunities in the acquisition and resolution of stressed assets in the real estate sector,” the statement said.
Mr. Mistry had said HDFC has to create new businesses that would give them value 5-10 years from now.
“That is why we are foraying into two areas in financial services. Our core area is financial services and whatever we do, we will do in financial services,” Mr. Mistry had said.