HSBC is likely to raise up to Rs 2,450 crore by selling its stake in Axis Bank and YES Bank, said senior bankers familiar with the development.
The foreign lender holds 4.76 per cent stake or 16.8 million shares in YES Bank through its subsidiary, HSBC Bank Mauritius Ltd A/C HSBC IRIS Investments Mauritius Ltd. HSBC has fixed a price band of Rs 318-325 per share for its stake in YES Bank, bankers said. The bank is likely to raise Rs 534-546 crore through this deal.
In Axis, the same HSBC Mauritian arm has 4.75 per cent stake or 19.6 million shares. The price band for sale of these is fixed at Rs 950-970 per share. HSBC will be able to raise Rs 1,860-1,900 crore through this transaction.
Goldman Sachs and HSBC are joint book runners for the issue. HSBC also has another 4.39 per cent stake or 18.1 million shares in Axis Bank through HSBC Mauritius Ltd A/C Cinnamon Capital Ltd. According to bankers, this does not represent HSBC’s direct investment in Axis Bank.
Global banks and institutional investors have been selling their stakes in Indian companies over recent months to raise funds and strengthen their balance sheet in the current uncertain macro-economic environment. In February, Citigroup Inc sold its entire 9.85 per stake in India's biggest home finance company, Housing Development Finance Corporation, for Rs 9,550 crore. The move was aimed to strengthen its balance sheet to meet the tight Basel-III capital requirements.
Citi made a pre-tax gain of $1.1 billion or Rs 5,490 crore and earned a post tax profit of $722 million or Rs 3,550 crore.
In March, global private equity firm Warburg Pincus exited Kotak Mahindra Bank by selling its stake in the latter. A month later, Rabobank sold 3.59 per cent stake in YES Bank for Rs 453 crore. Rabobank, however, continues to hold a minority stake in YES Bank.
Foreign investors such as Khazanah Nasional, Carlyle Group and Temasek Holdings have also pared their stakes in Indian financial services companies in the past few months.