HDFC plans stock split

Housing Development Finance Corporation’s (HDFC’s) board of directors will consider a proposal to split the mortgage lender’s shares when it meets next on May 3, according to statement filed with the Bombay Stock Exchange (BSE).

“The idea is to get more retail investors. Our stock is currently trading in the Rs 2,700-2,800 range. At this price, the quantum of new investors coming in is not very large,” said HDFC Vice-Chairman and Chief Executive Officer Keki Mistry. “We are largely owned by foreign institutional investors (FIIs) and we want more retail investors to come in. The proposal will be considered by the board at its next board meeting,” he added.

The mortgage financier’s shares fell 1.59 per cent on the Bombay Stock Exchange (BSE) to close at Rs 2,810.4. It has a full market capitalisation of Rs 80,672 crore and a free float of Rs 72,604 crore.

Institutional investors owned 87.67 per cent of the company as on March 31. Within that, FIIs owned 57.78 per cent. Citigroup, through two Mauritius-based subsidiaries, holds 11.62 per cent stake in HDFC. Another foreign investor, CMP Asia, has 5.36 per cent stake.

HDFC will report its results for the period ending March 31 on May 3. It is expected to report a healthy growth in advances.

The mortgage financier is engaged in a fierce fight with State Bank of India (SBI) and has opted to re-introduce its fixed-cum-floating loan scheme. The offer is valid till the end of the month, which is also when SBI’s special home loan scheme expires.