Businessmen with briefcases walk through a road. (Photographer: Chris Ratcliffe/Bloomberg)

Exclusive: KKR, GIC Lead Talks To Buy $2-Billion Stake In HDFC

A consortium of investors led by private equity firm KKR and Singapore’s sovereign wealth fund GIC is in final stages of talks to acquire up to $2 billion stake in HDFC Ltd., three people aware of the matter told BloombergQuint requesting anonymity.

India’s largest mortgage lender has held meetings with officials of KKR and GIC to sell up to 5 percent, the people quoted above said. HDFC may use nearly half the funds raised to subscribe to the preferential allotment of its subsidiary HDFC Bank Ltd., they said.

It will not only take care of HDFC’s capital requirement for the next few years but also help it maintain a sizable stake in HDFC Bank, one of the people quoted above said.

The housing finance giant’s board will meet on Dec. 19 to consider the fund-raising proposal. It’s banking arm — HDFC Bank — has also informed exchanges that its board will on Dec. 20 consider raising funds through a qualified institutional placement, American Depository Receipts and a preferential issue to its parent HDFC.

HDFC and GIC are yet to respond to BloombergQuint’s emailed queries. KKR declined to comment on “market speculation”.

The fundraise will also help HDFC’s management explore M&A opportunities in the mortgage segment, infuse capital in its health insurance business, and acquire stressed assets in the real estate segment, Suresh Ganapathy, analyst at brokerage Macquarie, said in his latest report.

Shares of HDFC rose more than 1 percent tracking the benchmark Nifty Bank index.