HDFC To Sell 10% Stake In HDFC Capital To Abu Dhabi Investment Authority For Rs 184 Crore

HDFC Capital is a wholly-owned subsidiary of HDFC and is in the business of managing private equity (PE) funds focused on the real estate sector in India

HDFC Capital, which was set up in 2016, manages about $3 billion funding platform. Image: Getty

New Delhi: Mortgage lender HDFC Ltd on Wednesday said that it has entered bidding deal to sell 10 per cent stake in HDFC Capital Advisors to an arm of Abu Dhabi Investment Authority (ADIA) for Rs 184 crore ($24.09 million).

According to a report by Reuters, the deal comes two weeks after HDFC and HDFC Bank, India’s largest private-sector lender, floated merger plans to create a financial services behemoth to tap rising demand for credit.

HDFC Capital is a wholly-owned subsidiary of HDFC and is in the business of managing private equity (PE) funds focused on the real estate sector in India.

HDFC Capital, which was set up in 2016, manages about $3 billion funding platform.

In a statement, HDFC Chairman Deepak Parekh said, “Investment by ADIA will enable HDFC Capital to leverage ADIA’s global expertise and experience to further propel HDFC Capital towards becoming a leading investment platform for global and local investors.”

The release mentioned that ADIA is also the primary investor in the alternative investment funds managed by HDFC Capital.

“The funds managed by HDFC Capital provide long-term, flexible funding across the lifecycle of affordable and mid-income housing projects including early-stage funding. In addition, the funds will also invest in technology companies (construction technology, fin-tech, clean-tech etc.) engaged in the affordable housing ecosystem,” said the company.

According to the report, HDFC is also in active discussions with leading global investors to raise additional funds for the development of affordable and mid-income housing projects in the country.

Following the announcement of the bidding agreement, HDFC shares, which have slumped 16.1 per cent year-to-date, were up 1.3 per cent on Wednesday.