HDFC To Mop Up Rs 4,000 Cr Debt

Mumbai: Housing Development Finance Corporation (HDFC) has decided to mobilize Rs 4,000 crore ($1 billion) debt to finance its stake purchase in HDFC Bank. The debt will be raised over a timeframe of 18 months.

Of late, HDFC Bank announced the acquisition of Centurion Bank of Punjab in an all-stock deal. Subsequently, HDFC Bank announced a private placement of equity to HDFC to enable the mortgage lender to maintain its stake at the current level of 23.3 per cent. This entails an investment of almost $1 billion by HDFC.

HDFC May List Key Subsidiaries

HDFC Standard Life is worth Rs 3000 crore, of which HDFC owns 76 per cent and even as chairman of HDFC, Deepak Parekh, looks to offload further to its partners, an initial public offering (IPO) is clearly on cards. They plan to list HDFC''s asset management business by end of this year or first quarter next year and the life insurance company a few months after that,said Parekh. On the Asset Management Company (AMC) front, HDFC''s owns 63 per cent business in a company worth Rs 4,000 crore, with Standard Investments holding the rest. As long as you leave something on the table which we always do, investors would want a quality product at any time.

Going by the valuations, AMC stake sales have showed recently Parekh''s company too may have a good ride. Based on the deals in the recent past, AMCs are now valued over 10 per cent of their Assets Under Management (AUM) than just 4-5 per cent of their assets as done earlier. For ICICI and HFDC chiefs competition goes beyond just the institutions they manage. It is now about the bankers themselves and how they unlock value for the shareholder. The recent buyout of Centurion bank is an example of how HDFC is now in a fresh strategy to scale up and Deepak Parekh is clear, despite the criticism on CBoP merger, it will bear fruits in the medium term. The first move in that direction for the bank will be to move away from personal loans to corporate growth. Having sold 26 per cent for Rs 235 crore in its general insurance business to Germany''s ERGO International, HDFC''s has kicked off what will be a serious exercise in unlocking value.

HDFC Bank, Centurion Boards Grant 1:29 Share Swap Ratio

Mumbai: Shareholders of Centurion Bank of Punjab will be qualified to exchange 29 shares into one share of HDFC Bank. This follows the board of directors of the two banks approving on Feb 25 a share-swap ratio of 1:29. HDFC Bank''s share closed at Rs 1,422.70, down by 3.5 per cent while Centurion Bank ended the day at Rs 48.25, lower by 14.45 per cent on the BSE on Feb 25. The entire process of the amalgamation will take about four months for completion. The amalgamated entity will be known as HDFC Bank.

The near-term impact on HDFC''s financials will be moderately negative considering the relatively poor financials of Centurion Bank. It will take HDFC Bank a while to leverage the branch network of Centurion Bank to improve its financials. HDFC Bank, said that the merger will create a larger entity and bring together the strengths of both banks in terms of technology, products, distribution, manpower and experience. The net non-performing assets as a percentage of net advances for HDFC Bank for the year 2006-07 stands at 0.43 per cent while that for Centurion Bank is at 1.26 per cent. Post amalgamation, the NPA of HDFC Bank might decline further by 15-20 basis points to 0.6 per cent.

HDFC Bank Signs Agreement With Symantec

Mumbai: Private sector lender HDFC Bank has inked a $7.4 million, three-year strategic enterprise agreement with Symantec for IT compliance, enterprise security and storage management solutions. Symantec will also give HDFC Bank with consulting and implementation services. The bank has forayed into this deal with Symantec to enhance the security posture, ensure our data are protected and available and help facilitate our compliance and corporate governance programmes.

Symantec will give security and storage solutions and services. Its IT compliance solution will help the bank to automate and standardise processes for compliance with laws, regulations and frameworks, comprising SOX, Basel-II. Symantec Security Information Manager will give HDFC Bank the ability to automate incident management and event correlation across all security devices, network devices, applications, servers, operating systems and databases. The final layer of solution will be focused on protecting critical network endpoints of HDFC Bank with the integrated Symantec Endpoint Protection and Symantec Network Access Control solutions

HDFC Slashes Home Loan Rates 25bps

Mumbai: Housing finance company HDFC said on Jan 31, that it has decreased its retail prime-lending rate (RPLR) by 25 basis points, with effect from February 1. The decrease in rates will benefit all the existing borrowers. The HDFC''s current RPLR is 14 per cent, which will now reduce to 13.75 per cent. For the new home loan customers, HDFC''s rate of interest under the Adjustable Rate Home Loan continues to be at 10.25 per cent.