Key Points of HDFC Fundraising Planning via NCDs Offering:
- HDFC plans to raise Rs 57,000 crore through non-convertible debentures (NCDs) on a private placement basis.
- The fundraising will be done in multiple tranches and the decision was approved by the board of directors.
- The company will issue unsecured redeemable NCDs under a Shelf Placement Memorandum in accordance with the shareholders’ approval granted at the 45th Annual General Meeting held in June.
- HDFC’s board has approved an increase in the overall borrowing limit of the company to Rs 6.5 lakh crore outstanding, up from Rs 6 lakh crore earlier.
- The increase in borrowing limit has been recommended for approval by the members of the corporation through postal ballot.
- HDFC Bank’s merger is expected to be completed by the third quarter of next year, pending approval from the Reserve Bank, after receiving approval from the National Company Law Tribunal (NCLT).
- HDFC is the largest issuer of debt in the local market in CY22, accounting for 7.7% of the issuances, according to Bloomberg data.
Details of HDFC Fundraising Planning via NCDs Offering:
Housing Development Finance Corporation (HDFC) has announced its plans to raise Rs 57,000 crore through non-convertible debentures (NCDs) on a private placement basis. This decision was approved by the board of directors and will be carried out in multiple tranches. The company will issue unsecured redeemable NCDs under a Shelf Placement Memorandum in accordance with the shareholders’ approval granted at the 45th Annual General Meeting held in June.
In addition to this fundraising, HDFC’s board has also approved an increase in the overall borrowing limit of the company to Rs 6.5 lakh crore outstanding, up from Rs 6 lakh crore earlier. This increase has been recommended for approval by the members of the corporation through postal ballot. The reason for this increase is due to the company’s outstanding borrowings reaching Rs 5.70 lakh crore. HDFC believes it will need to borrow further for business purposes until the effective date of its merger with HDFC Bank.
HDFC Bank’s merger is expected to be completed by the third quarter of next year, pending approval from the Reserve Bank. Recently, the National Company Law Tribunal (NCLT) approved the merger. This move to raise funds is the second proposal from HDFC after it raised about Rs 25,000 crore in February, offering a coupon of 7.97% for the 10-year money.
HDFC is the largest issuer of debt in the local market in CY22, accounting for 7.7% of the issuances, according to Bloomberg data. Post-merger, HDFC Bank will become the largest private sector bank, with more than Rs 20 lakh crore of assets, out of which Rs 7 lakh crore will be the mortgage portfolio. On Monday, HDFC’s shares closed 0.23% lower at Rs 2,554.05 apiece on NSE.
About HDFC:
Based in Mumbai, HDFC is a prominent private development finance institution that provides housing finance services in India. Apart from housing finance, the company has expanded its presence in various other areas, including banking, life and general insurance, asset management, venture capital, realty, education, deposits, and education loans.
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