Financial Daily from THE HINDU group of publications
Tuesday, Dec 03, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 03, 2002 |
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Corporate
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Announcements Money & Banking - Housing Finance HDFC bonus issue, buyback get shareholders' approval Our Bureau
MUMBAI, Dec. 2 THE shareholders of Housing Development Finance Corporation have approved the proposed 1:1 bonus issue of shares of as well as an in-principle enabling resolution permitting buyback of shares by HDFC at an EGM here on Monday. Other resolutions passed were increase in authorised share capital from Rs 220 crore to Rs 260 crore. Part of the company's reserves would be capitalised through the issue of bonus shares - Rs 50 crore from the capital redemption reserve account and Rs 71.96 crore from the Securities Premium account. The resolution for allowing buyback of the company's own shares up to five per cent of its equity is only an enabling one, said Mr Deepak Parekh, Chairman, HDFC. Actual buyback would require relaxation of the debt-equity ratio required for buyback, currently at 2:1. For this, the company has applied to the National Housing Bank to appeal to the Company Law Board to consider relaxation of the debt-equity ratio for a class of housing finance companies, said Mr Parekh. Buyback would ensure better utilisation of capital as well as increased return on equity, he added. As to the method and price of buyback, the company is yet to take a view on it. Replying to a shareholder query, Mr Parekh said the company is not going to raise fresh capital. However, he said, the company continues to explore foreign markets, such as Europe, to keep international investor interest alive as well as to create a new market for foreign investors, he said. FII holding in the company is at 50 per cent with FDI holding at 23 per cent, he said; whereas, Indian financial institutions and banks held only around 6.55 per cent stake. "However, there is no dominant ownership by any foreign investor, they are spread across the globe, but we would like to keep investor interest alive," he said, referring to foreign ownership in the company. The company is not considering any kind of merger with HDFC Bank; neither is the bank going to enter the housing finance industry though it could, in principle, do so.
Opposition by proxy THE resolution to increase the authorised share capital of HDFC from Rs 220 crore to Rs 260 crore was today opposed by a proxy shareholder at the company's EGM on Monday. The proxy represented the custodian for a foreign institutional investor who, it is learnt, holds a little over one per cent stake in the company. However the proxy shareholder did not oppose the other resolutions, which have a bearing on the authorised share capital.
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