Stan Life Aberdeen £258m India sale to fund buy back

Edinburgh-based fund management giant Standard Life Aberdeen said it plans to sell yet another portion of its stake in Indian financial group HDFC for as much as £258 million — and use the money to buy back its shares.

Standard Life Aberdeen said it plans to sell up to 4% of HDFC Asset Management Company Limited — leaving it with roughly 25.89% of HDFC worth about £2 billion.

In a stock exchange statement, Standard Life Aberdeen said: “The company notes that on Tuesday, 3 December 2019, Standard Life Investments informed the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited that it intends to commence an offer for sale process in respect of up to 4,750,000 shares in HDFC AMC, with an option to additionally sell up to 3,850,000 shares through the offer in event of oversubscription …

“Assuming full subscription of the base shares at the floor price disclosed, SLI would anticipate receiving approximately Rs 13,293bn (c£142m), net of taxes and expenses, from the sale pursuant to the offer. 

“In the event of oversubscription and were the full amount of additional shares also to be sold, SLI would anticipate receiving an additional Rs 10,774bn (c£116m), net of taxes and expenses.

“The collective shares constitute 4.04% of the paid-up, issued equity share capital of HDFC AMC. 

“Should all of the collective shares be sold through the offer, SLI’s remaining shareholding would be 25.89% of HDFC AMC.  

“Based on today’s closing share price of Rs 3,442.8, the value of this remaining shareholding would be approximately Rs 190bn (c£2.03bn).

“Subject to satisfactory conclusion of the offer, and given its existing capital strength, the company intends to return the proceeds of the offer to shareholders by way of a further share buyback programme, subject to both the relevant regulatory approvals and market conditions, and operating within the existing shareholder authorities …”