The People’s Bank of China (PBOC), the country’s apex bank, has raised its stake in Housing Development Finance Corporation (HDFC), India’s largest mortgage lender, according to local media reports.
The central bank of China raised its stake from 0.8 percent to 1.01 percent, which is equal to 17.49 million shares of HDFC.
Keki Mistry, VC, and chief executive at HDFC told the media, “The disclosure has been made now since the stake has hit 1 regulatory threshold. PBOC has been accumulating the shares over a year and is now holding 1 percent.”
According to rules, a company is required to disclose the name of the shareholders only when they hold more than 1 percent in a company.
The recent development comes at a time when it is perceived that China is using the Coronavirus pandemic to buy ailing shares across the globe.
However, the central bank of China is not bound by and regulations that stop it from investing in any Indian company. Interestingly, around 70 percent of HDFC is owned by foreign institutional investors.
Due to the coronavirus pandemic, shares of HDFC has lost 32 percent of its value from its January 14 high of 2500 per share.
The PBOC trimmed the mandatory reserve ratio for rural and small commercial banks by one percentage point and free up credit in response to the slowdown caused by the coronavirus pandemic.
Reportedly, this will lead to the freeing up of $56 billion of liquidity, with half the cut taking effect on April 15 and the rest on May 15.