HDFC plunges 6% as Carlyle sells 3.7% stake for nearly Rs 4,300 crore

NEW DELHI: Shares of housing finance major HDFC today plummeted by over 6 per cent amid reports that global fund house Carlyle has sold its 3.7 per cent stake in the company for nearly Rs 4,300 crore.

According to Reuters, the deal is the country's fourth-biggest equity deal this year. The sale marks the US private equity firm's exit from HDFC after nearly doubling its original 2007 investment of $650 million with this latest sale and one in February that raised $270 million.

HDFC scrip fell by 6.35 per cent to Rs 738.10 on the BSE after a weak opening. The stock was the top loser among the 30-Sensex blue-chips during the morning trade.

US-based Carlyle, which held 5.7 crore shares through one of its entities CMP Asia in Housing Finance Development Corporation (HDFC), today sold its entire holding through open market transactions, investment banking sources involved in the deal said.

The deal took place at a price of Rs 750-755 per share, they said.

HDFC shares were trading at Rs 753.80, down 4.36 per cent at 1153 hrs on the BSE. The company currently commands a market value of Rs 1,15,283 crore.

The shares have witnessed a sharp rally this year, rising from near Rs 600 level in December, 2011.

The HDFC share sale came after a slew of such transactions in the market since the beginning of 2012 as investors took advantage of stock market gains to reduce their holdings or take profit out of their India portfolio companies.

The BSE index Sensex is up nearly 23 per cent so far this year. The index dropped nearly 25 percent in 2011, making it one of the worst global performers and leaving few options for private equity firms to exit their portfolio companies through IPOs or block deals.

Investment banks in India have been betting on sale of large blocks of shares by institutional investors this year to bolster underwriting fees that had been badly hit by fewer large IPOs and follow-on share sales in Asia's third-largest economy.