Gautam Vir, managing director and CEO of DCB, in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta/Mumbai, Feb. 14: Housing Development Finance Corporation (HDFC) and two others ? Khattar Holdings from Singapore and Amtel Finance ? have picked up a 15 per cent stake in Development Credit Bank for Rs 52 crore.

The shareholding was obtained through a private placement of equity at a price of Rs 45 per share. The trio, who have picked up 4.67 per cent each, will step in as pure financial investors in Development Credit Bank (DCB).

Following the sale, the shareholding of Aga Khan Foundation for Economic Development, the principal promoter of the Mumbai-based bank, will come down to 58 per cent from the existing 69 per cent.

This is HDFC’s second significant investment in a private sector bank after HDFC Bank where it holds close to 23 per cent.

Singapore-based Khattar Holdings Pte Ltd is promoted by Satpal Khattar. It is engaged in infrastructure development in the island city-state with investments in the UK, China and India.

DCB said the funds raised from the private equity placement would be utilised towards improving provision covers on non-performing assets and raise the size of its balance-sheet.

The bank is also planning to raise around Rs 300 crore by way of an initial public offering, said chairman Nasser Munjee.

“Our initial public offering will further dilute the principal promoter’s stake to 33-35 per cent depending on the issue price, which will be determined through the book-building process,” said Gautam Vir, managing director and chief executive officer of DCB.

DCB was in dire need to increase its tier I capital as nearly 7 per cent of its net advances turned sticky by the end of 2004-05.

Moreover, the bank suffered a loss of Rs 163 crore last fiscal against a net profit of Rs 17.36 crore the previous year. Total deposits and advances also declined by 13 per cent and 18 per cent, respectively.

The bank’s capital adequacy ratio stood at 9.9 per cent vis-?-vis the mandatory minimum of 9 per cent.