HDFC Bank to raise its stake in Clearing Corp to 9% for Rs 1.24 billion

HDFC Bank on Tuesday said it will raise its stake in Clearing Corporation of India Ltd (CCIL) to 9 per cent by acquiring 2 million shares of the company.

The deal is for a cash consideration of Rs 1.24 billion.

"The transaction is for an acquisition of 4 per cent equity in CCIL. The bank currently holds 5 per cent of the total equity capital of CCIL. Hence, it is proposed to increase the stake in CCIL from the current 5 per cent to 9 per cent from an investment perspective," HDFC Bank said in a regulatory filing.

CCIL provides clearing and settlement services for transactions in the money market, government securities, foreign exchange and carries out related activities.

HDFC Bank said it would require prior approval from the Reserve Bank of India (RBI) for the transaction expected to be completed by the end of December 2018.

Incorporated in April 2001, CCIL had consolidated revenue of Rs 6.7 billion in 2017-18.

In 2016-17, its total income stood at Rs 7.58 billion, while in 2015-16, the company reported revenues of Rs 6.29 billion.

Stock of HDFC Bank closed flat at Rs 2,015.25 on BSE.