L&T Fin gets 3-fold returns from Federal Bank stake sale

Tags: Companies
Shares of Federal Bank fell over 1.50 per cent on Tuesday after L&T Finance Holdings offloaded its entire 4.67 per cent stake in the company, in a bulk deal, amounting to Rs 362.72 crore. By selling its stake in the private lender, the L&T arm earned three folds on the shares it bought in the company four years ago.

L&T Finance Holdings had been a stakeholder in the company since December quarter of 2008, data available with Capitaline suggested. The public shareholder had been holding 79.95 lakh shares in the company and had not made any transaction since then, if one goes by quarterly shareholding pattern of Federal Bank.

During the December quarter of 2008, the private lender had traded Rs 139 per share, on an average, and the scrip had gone up to Rs 468.75 till Monday’s close.

BSE data showed that it sold its entire stake at Rs 453.65 per share, which was three times the investment it had in the firm at December 31, 2008 price of Rs 149.10.

On Tuesday, Federal Bank opened higher at Rs 473 on BSE but subsequently plunged over 4.3 per cent after the bulk deal took place. The scrip later closed the session at Rs 461.35, down 1.58 per cent.

BSE data showed that HSBC Global Investment Funds bought a part of the sold stake (1.42 lakh shares, or 0.78 per cent in the company) at Rs 453 per share, aggregating Rs 64.64 crore.

Meanwhile, shares of L&T Finance Holdings added 1.06 per cent to close at Rs 76.05, partly after the company told BSE that it intends to issue unsecured, redeemable, non-convertible debentures aggregating Rs 125 crore on a private placement basis.

After L&T Finance’s exit, International Finance Corporation (IFC), (4.99 per cent), Life Insurance Corporation (4.88 per cent) and Emirates Financial Services (4.16 per cent) remained the three stakeholders that own more than four per cent stake in the company as of September quarter.

Warhol, (2.87 per cent) and Morgan Stanley Mauritius Co (2.80 per cent) remained other major stake holders.


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