China's central bank buys 1% stake in HDFC & SEBI Action

China's central bank buys 1% stake in HDFC

China’s central bank has bought 1.01 per cent stake in HDFC. 

According to the shareholding disclosures for the March quarter, People’s Bank of China held 1.75 crore shares of India’s biggest housing mortgage lender.

It is not known whether the Chinese central bank bought all the shares between January and March. Companies need to disclose shareholding changes to the exchanges at the end of every quarter only if an investor's stake crosses 1 per cent.

HDFC shares fell nearly 40 per cent this year from a high of Rs 2,493 to a low of Rs 1,499 last week. The stock rallied 14 per cent last week to close at Rs 1,702 on Thursday.

China-backed funds are seeking to buy Indian financial assets after the Covid-19 outbreak caused a major slump in the valuation of local companies.

SEBI ACTION

On April 13 SEBI said China-led stock transactions will be watched by SEBI

A report suggested the Finance Ministry was ruffled as regulators had not raised flags when PBC was buying shares over the past few weeks. PBC now holds 1.74 crore HDFC shares. HDFC said PBC earlier held a 0.8 per cent stake. Shareholding below 1 per cent in not disclosed by exchanges publicly. It is not clear when PBC’s stake reached 0.8 per cent.

The US, Japan and Australia have issued restrictions against Chinese companies buying assets currently. Media reports suggest Japan is ready to pay its corporations to move out of China.

Shankar Sharma, Co-founder and Vice-Chairman, First Global, says PBC’s move should be taken seriously. “Even the US is considering restricting investments and listing by Chinese companies, then why not India,” Sharma said.

Source : Various sources