MUFG's talks for minority stake in HDB Financial said to be stalled

Mitsubishi UFJ Financial Group Inc.'s negotiations for a minority stake in HDFC Bank Ltd.'s consumer lending unit are at a standstill due to differences over the level of influence it will have in the company's strategy, according to people familiar with the matter.

While MUFG is still interested in HDB Financial Services Ltd., the talks may face further delays or even fall apart, the people said, asking not to be identified because the matter is private. One of the people said that HDFC could consider an initial public offering of the consumer lending unit as an alternative.

No final decisions have been made, and negotiations could get back on track if the Japanese lender is offered a significant say in HDBF's business strategy. MUFG has been seeking to build its presence in India, where HDBF offers services such as personal, gold, and auto loans. Bloomberg News reported earlier this year that MUFG, Japan's biggest lender, was in talks for a 20% stake for about $1.7 billion.