HDFC Bank, India’s largest lender, has decided to turn down a proposal from Japan’s Mitsubishi UFJ Financial Group (MUFG) to acquire a 20% stake in its non-banking financial company (NBFC) subsidiary, HDB Financial Services. The Japanese banking giant had offered $2 billion for the stake, which would have valued HDB Financial Services at $10 billion.
Instead of accepting the offer, HDFC Bank’s board has chosen to proceed with listing HDB Financial Services. This move aligns with the regulations set by the Reserve Bank of India, which the bank aims to comply with through the listing process.
The decision is likely to disappoint Japanese officials, as the deal was seen as part of strengthening economic and strategic ties between India and Japan. MUFG’s interest in acquiring a substantial stake in HDB Financial Services reflected the Japanese bank’s ambition to expand its presence in India.
HDFC Bank currently holds a 95% stake in HDB Financial Services, and the listing of the NBFC unit is expected to be a significant step forward for the company.
