Mortgage lender Housing Development Finance Corporation (HDFC) is expected to take a call on how to further divest stake in Gruh Finance to meet RBI directions after the merger of the housing finance company with Bandhan Bank.

Gruh AGM

A decision to this end is expected after the annual general meeting of Gruh on July 19. While it has done two rounds of stake sales on the stock exchanges, it could potentially look to divest further equity to an institutional investor, said a person familiar with the development.

According to market experts, HDFC will have to sell another 9 per cent, or 6.7 crore shares in Gruh, to meet RBI norms, under which it cannot hold more than 9.99 per cent stake in the merged entity.

As on March 31, 2019, HDFC held 56.09 per cent stake in Gruh. Since then, it has sold over 10 per cent of its holding in the company in two transactions on the stock exchange – on May 24 it divested 6.1 per cent stake, and then it sold off 4.22 per cent equity on June 14. “The 56 per cent stake in Gruh of HDFC translates to about 15 per cent holding in the merged entity of Bandhan Bank. After another nine per cent disinvestment in Gruh, HDFC’s stake in the merged Bandhan Bank will come down to the RBI’s mandated level,” said a second source, adding that it will hold about 37 per cent stake in Gruh.

The RBI had, in March this year, approved the proposed scheme of amalgamation between Gruh and Bandhan Bank.

The board of directors of the housing finance company and the private bank had individually approved the merger in January this year.

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