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HDFC okays issuance of 6.43 crore equity shares on preferential allotment basis to 10 investors

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Housing finance major HDFC Limited today said its Committee of Directors had approved the issue of equity shares up to an aggregate amount not exceeding Rs. 13,000 crore through a combination of a Preferential Allotment and Qualified Institutions Placement, subject to shareholders' approval through postal ballot.
 
A press release from the company recalled that its Board of Directors had, on December 19, 2017 approved the raising of funds by way of equity shares and/or other permissible securities.
 
The release said that the Committee of Directors had approved the issuance of 6,43,29,882 equity shares of face value of Rs. 2 per share at a price of Rs. 1,726.05 per share on a preferential allotment basis to 10 investors. The price per share is based on the Securities & Exchange Board of India (SEBI) price formula and stands at a marginal premium over the average price of the equity shares over the preceding two weeks, it said.
 
The aggregate capital infusion through the Preferential Allotment will be Rs. 11,104 crore.  The preferential allotment represents 3.87% of the Corporation’s enhanced equity share capital post the issue, it said.
 
According to the release, the preferential allotment is proposed to be made to the following investors: 
·        3,01,26,589 equity shares to Waverly Pte. Ltd, an affiliate of GIC; 
·        1,00,00,000 equity shares to OMERS Administration Corporation, the administrator of the pension plan for Ontario’s municipal employees (OMERS), Canada;
·        92,69,719 equity shares to Silverview Investments Pte Ltd. (an affiliate of global investment firm KKR); 
·        91,40,000 equity shares to Carmignac Group, France (represented through five entities - Carmignac Investissement, Carmignac Portfolio Investissement, Carmignac Portfolio Investissement Latitude, Carmignac Patrimoine and Carmignac Portfolio Patrimoine); and 
·        57,93,574 equity shares to Premji Invest represented through Azim Premji Trust, India  and PI Opportunities Fund – I, India. 
 
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The release said the preferential allotment is in accordance with Chapter VII of the Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2009.  The allotment shall be completed within a period of 15 days from the date of passing of a Special Resolution by the shareholders through postal ballot, it said.
  
The Committee of Directors also recommended the issue of equity shares under a Qualified Institutions Placement (QIP) basis for an amount not exceeding Rs. 1,896 crore.   As per extant regulations, the allotment for the QIP would need to be completed within a period of 12 months from the date of shareholders’ approval. Further details of the QIP when crystallised will be intimated accordingly, it said.
 
"As mentioned earlier, the key objective of raising capital is to participate in the preferential issue of HDFC Bank Limited up to an amount not exceeding Rs. 8,500 crore. This would enable the Corporation to maintain its current shareholding in HDFC Bank. 
 
"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 Corporation will also need capital to sponsor funds it has set up to invest in the equity and mezzanine debt of affordable housing projects, support capital requirements of its subsidiary companies as and when required and capitalise on organic and inorganic growth opportunities in the affordable housing finance space," the release added.
 
According to the release, the Carmignac Group, founded in 1989, is one of Europe's leading asset managers.
 
GIC is a leading global investment firm with well over $100 billion in assets under management. Established in 1981 to secure the financial future of Singapore, the firm manages Singapore’s foreign reserves.
 
Established  in 1976, KKR is a leading global investment  firm with industry-leading  investment  experience, in-depth  industry  knowledge, sophisticated  processes for growing and improving  businesses,  and a strong culture  committed  to teamwork. 
 
Founded in 1962, OMERS is one of Canada's largest defined benefit pension plans, with more than $85 billion in net assets, as at December 31, 2016.
 
Premji Invest, the investment arm of Mr. Azim Premji and his endowment, manages assets across listed equities, private equity and Fixed Income.  
 
NNN
 
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