The total income has increased from Rs 6,733.6 million in SQ-01 to Rs 7,622.7 million in the quarter ended 30 September 2002. The board has also approved the issue of bonus shares in the ratio of one equity share for every one equity share held.

The board of directors of HDFC, at its meeting held today, decided to consider the buyback of the equity shares of the corporation up to 5 per cent of the paid-up equity capital after the receipt of all requisite approvals.

The exact number of the shares to be bought back, the price at which the shares would be bought back, the mode of the buyback and the terms of the buyback would be decided by the board after the receipt of all regulatory approvals, including in particular under section 77A(2) of the Companies Act 1956.

Based on the current regulations, the corporation cannot effect a buyback since its debt equity ratio exceeds the maximum of 2:1 prescribed under section 77A of the Companies Act 1956.

The buyback would be subject to compliance with the prescribed procedures under the Companies Act and the Securities and Exchange Board of India buyback regulations and subject to lowering of capital adequacy norms by the National Housing Bank (NHB) and subject to other requisite approvals. The change in capital adequacy norms by NHB bringing down the risk weights is required so that after the buyback HDFC has adequate capital adequacy prescribed by NHB.

The HDFC board has decided to wait for the regulatory amendments / approvals as stated above, up to the first week of January 2003 and in case the required amendments / approvals are not received by such time, the board may consider other options.

The HDFC board of directors has decided to convene an extraordinary general meeting of the members on 2 December 2002 to obtain the directors’ approval reclassification and increase in the authorised capital, and also to make changes in the memorandum and articles of the association. It will also seek changes in the employees’ stock option scheme to accommodate the effect of the bonus issue.