HDFC Bank says no evidence to suggest FPI selling is related to Sebi circular

Sebi’s mandate to secure additional disclosures from high risk FPIs ends on February 1

HDFC Bank on January 25 said that there was no evidence suggesting that the selling by foreign portfolio investors was related to the Securities and Exchange Board of India (Sebi) guidelines.

“No evidence to suggest any FPI selling is related to the Sebi circular. Understand that companies with no identifiable promoters won’t be impacted by the Sebi circular,” the bank told CNBC TV-18 a day after the channel reported citing sources from the bank that the stock was a victim of selloff due to the regulator's guidelines on beneficial owner disclosure.

“Sebi's understanding that BO disclosure rules not to be applied to companies with no identifiable promoter, needs to be communicated in writing,” sources said earlier.

Also read: MC Explains | What are Sebi FPI norms and how are they linked to the market fall?

Sebi’s mandate to secure additional disclosures from high-risk FPIs ends on February 1. The market regulator released its consultation paper on enhanced disclosures from high-risk FPIs in May 2023. This was taken up in its June board meeting and a final circular was issued in August 2023.

The circular stipulated a 90-day period starting November 2023 for FPIs to submit the details on ownership of, economic interest in, and control of some objectively identified high-risk FPIs, which either have concentrated single group exposure or significant overall holdings in Indian equity investment portfolio.