Abrdn: Why shareholders could be set for a payday after £337m HDFC sale
Abrdn has offloaded its entire stake in Indian asset manager HDFC and could now be set to ramp up share buybacks as it looks to put cash back in investors’ pockets.
In a statement today, the vowel-stripped investor said it had sold its remaining 10.2 per cent stake in HDFC Asset Management for £337m via subsidiary firm.
Mumbai-based HDFC has plunged in value over the last four years after touching its all-time peak in 2019. Abrdn first began offloading its stake in the company last year when it dumped its six per cent stake for £225m.
The sale comes ahead of a blockbuster $40bn merger between the HDFC’s parent firm Housing Development Finance Corp and HDFC Bank scheduled to close next month.
Abrdn has been shedding its HDFC holdings ahead of the merger, with a £198m sale of HDFC Life insurance shares at the beginning of this month.
Bosses have committed to putting cash back in shareholders’ pockets with the cash reaped from its stake sales. The firm kicked off a £150m share buyback following earlier in June and said it would look to put more cash back in shareholders’ pockets from similar sales.
“The company is committed to returning a significant proportion of capital generated from further stake sales by way of share buybacks,” the firm said at the time.
Abrdn has been on a turnaround effort in recent years under the leadership of Stephen Bird. In its latest full year results, the firm showed that interactive investor, the retail investment and savings platform it acquired last year, grew revenue by 20 per cent.
The firm still notched a full year loss however as investors yanked cash amid market volatility of the past 18 months.
Bird described it as “one of the hardest investing years in living memory.”