Rumor: Citigroup may sell HDFC Stake

There is a strong rumor in the market that, the Citigroup may sell its 11.73% stake in HDFC Bank. The Valuation of this stake is US $ 1.71 Billion or Rs.8070 Crore. The reason for this rumor is that, Citigroup needs urgent fresh capital of US $ 5.5 Billion. So Speculators say that, Citigroup may think of selling its stake in HDFC Bank.

Citi’s 11.73% stake in HDFC is a potentially ready source of fresh capital for Citigroup because there are so many investors around world, who are waiting to invest in HDFC.

However, Citigroup has refused to sell its stake in HDFC Bank.

Here is the Market Cap of HDFC, HDFC Bank & Citigroup.

- HDFC    -  US $ 14.61 Billion

- HDFC Bank – US $ 12.81 Billion

- Citigroup   -  US $ 19.07 Billion

The combined Market Cap of HDFC & HDFC Bank is more than Citigroup’s market cap.

Citi needs capital badly. But even if it sells its HDFC stake, the share price of HDFC Bank will not fluctuate because these shares will not enter the open market.