HSBC trims Indian bank stake
(27 February 2006 – India) HSBC has sold a 3.9 percent stake in India’s UTI Bank in order to meet central bank requirements on foreign ownership.
India passed a law in 2005 which restricted the amount of foreign ownership of domestic banks to just five percent. However, the law allowed for larger stakes to be reduced over time.
HSBC which owned just over 14 percent of UTI, sold 11 million shares last week for US$79 million, which whittled down its stake to around eight percent.
UTI, which raised US$257 million in 2005 to boost its ability to provide loans in India’s fast growing economy, said it hadn’t planned to dilute its equity for at least three years but that the bank had grown quicker than expected.
HSBC originally bought its stake in the Indian bank in 2003 from a private equity investor, CDC Capital Partners.
HSBC which owned just over 14 percent of UTI, sold 11 million shares last week for US$79 million, which whittled down its stake to around eight percent.
UTI, which raised US$257 million in 2005 to boost its ability to provide loans in India’s fast growing economy, said it hadn’t planned to dilute its equity for at least three years but that the bank had grown quicker than expected.
HSBC originally bought its stake in the Indian bank in 2003 from a private equity investor, CDC Capital Partners.
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