China's central bank buys 1.75 crore shares in HDFC, raises stake to over 1%

China's central bank the people’s bank of china popularly known as People's Bank of China (PBOC) has purchased 1.75 crore shares in one of India's largest housing finance lenders, HDFC.

According to reports the deal that possibly happened in the March quarter has raised the total stake of PBOC in Indian firm to a little over 1 per cent. The shares of HDFC have come down by over 32% since the slide of Indian markets begun to post the outbreak of coronavirus.​

HDFC also owns over 20 per cent stake in HDFC bank, India's leading private sector bank. PBOC, an existing shareholder of HDFC earlier owned 0.8 per cent in the company as of March 2019.

The disclosure to stock exchanges has been made now since the stake has hit the 1 per cent regulatory threshold.

Amid the stock market crash, china has been buying stakes across major Asian financial institutions. Earlier in 2014, PBOC had picked up stakes in many high profile Italian companies during the eurozone debt crisis.

According to reports, Chinese banks were looking for newer avenues of investments in India.

The price at which shares were purchased could not be confirmed.HDFC stock saw a 33 per cent correction during the January-March quarter - from Rs 2,433.75 on January 1 to Rs 1,630.45 on March 31.

It had hit a low of Rs 1,501.80 apiece on the BSE on March 24, from where it saw a sharp rally to Rs 1,754 on March 27.

Central banks typically have investments in various asset classes including gold, foreign currencies and also bonds, including both government and corporate ones.

(With inputs from agencies)