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Chinese Central Bank picks up 1.01% stake in HDFC

The company has to disclose the shareholding changes to the exchange only if an investor’s stake crosses 1 percent. The disclosure takes place at the end of every quarter.

Apr 13, 2020 13:25 IST
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The People’s Bank of China has bought 1.75 crore shares in HDFC Ltd. The purchase of 1.01 percent in one of the largest housing finance leaders came to light during the shareholding disclosures for the March quarter.

The company has to disclose the shareholding changes to the exchange only if an investor’s stake crosses 1 percent. The disclosure takes place at the end of every quarter.

The timing of share purchases by the Chinese Central bank is important due to the fall in HDFC shares in recent weeks. It is still not known whether the Chinese Bank bought all the shares between January and March.

HDFC Shares: Key Highlights

•  The fall in HDFC shares was nearly 40 percent this year from a high of Rs 2493 to a low of Rs 1499 last week. The shares were closed at Rs 1,701.95 as of April 10, 2020.

•  Various Institutional Investors have shown interest in HDFC.

•  Life Insurance Corporation (LIC) has increased its holding in HDFC from 4.21 percent in December quarter to 4.67 percent.

•  HDFC itself owns 52.7 percent in HDFC Asset Management Company, 19.43 percent stake in HDFC bank, and 51.45 percent in HDFC Life Insurance Company.

•  On the other hand, HDFC bank owns 98 percent in HDFC securities and 96 percent stake in HDB Financial Services.

Background of China’s Stock Purchases:

Amid the stock market crash in major economies, China has been buying stakes across major Asian financial institutions. It results in increased investments in Asian Countries.

Apart from buying 1.01 percent in HDFC, China has also been investing in countries such as Bangladesh and Pakistan. The area of investment in these countries is mainly technology-oriented companies and infrastructure companies.

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