Amid volatile market due to COVID-19, China’s central bank raises stake in HDFC

HDFC disclosed that the People’s Bank of China now owns a 1.01 per cent stake

Peoples-bank-china-HDFC-logos Representational image: The People's Bank of China logo (top), HDFC Ltd logo (bottom)

While the listed price of the Housing Development Finance Corporation (HDFC) has made a rebound of late, it is still at prices last seen only in 2017. Making use of this opportunity, the People’s Bank of China—China’s central bank—has raised its stake in the company, now owning nearly 1.75 crore shares in the quarter ending in March, as disclosed by HDFC.

PBOC had raised their stake in HDFC from 0.8 per cent in March 2019 to 1.01 per cent as of March 2020. It is mandatory for companies to disclose stakeholders owning more than 1 per cent of a stake. Speaking to NDTV, HDFC Vice Chairman and CEO Keki Mistry said that PBOC had been accumulating shares for over a year.

In total, foreign portfolio investors own 70.88 per cent of HDFC, with investors including the American Invesco Oppenheimer Developing Market Fund (with a 3.33 per cent stake), the government of Singapore (with a 3.23 per cent stake) the Vanguard Group with a 1.74 and 1.47 per cent stake spread across three different funds, Norway’s Government Pension Fund (with a 1.11 per cent stake, the Europacific Growth Fund (with a 1.09 per cent stake) and the Dutch government pension fund Stichting Pensioenfonds ABP’s Emerging Markets Equity Pool (with a 1.07 per cent stake).

Indian stocks, like those around the world, have taken a battering in the aftermath of the coronavirus pandemic. Volality has been high, with the Sensex seeing both the biggest one-day drop in its history as well as the biggest one-day gain in 10 years in March.

HDFC’s closing price on the BSE was 1557.35, down nearly 25 per cent from its values in February and early March. HDFC was among the worst performers this year among the BSE’s 30 stocks.