Mumbai, Feb. 24
Trimming equity stake in accordance with RBI guidelines, HSBC Bank today sold two crore shares of UTI Bank in a bulk deal that also fetched it a handsome profit.
The sale price was Rs 318.61 for shares originally bought at Rs 90 in June 2004 when it acquired 14.62 per cent equity stake for $67.6 million. HSBC's stake in UTI Bank now stands reduced to 4.99 per cent.
RBI norms issued in February 2005 stipulate that foreign banks operating in India cannot hold more than five per cent stake in an Indian bank.
HSBC received a total consideration of Rs 638.1 crore ($142 million) for today's deal, an official from the bank said.
The official added: "UTI Bank has been a financial investment for us. The pricing was right and it was a good opportunity for us to cash in on the stake." After UTI Bank's GDR in March 2005, HSBC's shareholding in the Indian bank had came down to 12.18 per cent.
Dr P.J. Nayak, Chairman and Managing Director of UTI Bank, had earlier said that the bank was growing at a rate of one branch every two years but may not need equity capital for three years, after its GDR issue.
On Friday, the UTI Bank scrip closed at Rs 320.2 on the BSE.Related Stories:
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