People’s Bank of China (PBOC) has trimmed stake in HDFC following a furore in April when it emerged that China’s central bank had upped its holdings in India’s largest mortgage company, taking advantage of the market meltdown.
PBOC is no longer a shareholder in HDFC as per the June 2020 quarter shareholding disclosure made by the Mumbai-based financial services behemoth. During the quarter ended March 2020, PBOC held 17.5 million shares, or 1.01 per cent stake in HDFC, valued at Rs 3,300 crore at current market rate.
It is difficult to ascertain whether the Chinese authority has entirely sold its stake or just trimmed it below 1 per cent. Stock exchange shareholding disclosure captures names of public shareholders who own more than 1 per cent stake.
Whatever maybe the stake sale quantum, PBOC would have made a neat profit on the investment in matter of months.
During the March quarter, shares of HDFC had plunged more than 40 per cent. From March lows of Rs 1,473, the stock had rebounded 30 per cent in April. After a chopping June quarter, shares of HDFC are currently trading 30 per cent higher compared to their 2020 lows.
PBOC buying and selling price can’t be ascertained.
Market players said the Chinese central bank could have trimmed the exposure to avoid public glare. While the investment quantity was small, it had sparked a debate on whether Chinese investment firms were taking advantage of the fall in the domestic markets—triggered by the Covid-19 pandemic—to lap up shares of Indian companies.
Market regulator Securities and Exchange Board of India (Sebi) had even increased scrutiny of foreign portfolio investors (FPIs) from neighbouring countries.
Currently, Life Insurance Corporation (LIC) is the biggest shareholder in HDFC. The state-owned lender increased its stake by 72 basis points (bps) to 5.39 per cent during the June quarter. Invesco Oppenheimer, the second-biggest shareholder, also increased its stake in HDFC by 21 bps to 3.54 per cent.
Meanwhile, the Government of Singapore trimmed its take by 9 bps to 3.14 per cent. Vanguard and Government Pension Fund also pruned their holdings.