Private equity cut stakes in Kotak Bank and HDFC

Two global private equity majors-Carlyle Group and Warburg Pincus-offloaded substantial chunks of their holdings in two of India's leading financial services firms - HDFC and Kotak Mahindra Bank, respectively - through block deals on Wednesday, jointly worth about Rs 2,200 crore ($440 million).

CMP Asia, a Carlyle Group fund, sold 2 crore shares (about 1.4%) of HDFC, about a quarter of its stake in the home loan major, at Rs 677 per share, aggregating Rs 1,354 crore, block deal data on BSE showed. The disclosure on the BSE, on which the deal was stuck, did not give any name of buyers of the stake. However, market sources said SBI Life Insurance and Vontobel Funds, an FII, were among the buyers. Deutsche Securities acted as the broker for Carlyle, institutional dealers said.

In 2007, Carlyle had picked up 5.6% stake in HDFC for $650 million. At Wednesday's selling price, the PE fund has already made a profit of about 60% on this 1.4% stake, bought less than five years ago. Sheera Jasvir Ehsaas HDFC stock on the Bombay Stock Exchange closed the session at Rs 688, down 1.3% on the day.

Through another deal, USbased PE major Warburg Pincus sold 1.75 crore shares (2.4%) in private sector bank, Kotak Mahindra Bank, for Rs 875 crore. Disclosures about the deal, done on NSE, showed that SBI Life Insurance, ICICI Prudential MF, Blackrock foreign institutional investors (on behalf of Kuwait Investment Authority Fund), Vantobel Funds, and Deutsche Securities Mauritius were the buyers.
Institutional dealers pointed out that the Deutsche arm was a participatory note which bought the stake on behalf of Vantobel. The deal was done by India Infoline's institutional securities arm, dealers said. The Kotak Bank stock closed 2.3% higher at Rs 509.

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