HDFC raises Rs 25,000 crore through bonds

17 Feb 2023 , 07:55 AM

HDFC has raised Rs 25,000 crore ($3.03 billion) through bond issuance. 

According to VS Rangan, executive director of HDFC told ET, ‘the involvement was from across investor categories, with LIC (Life Insurance Corp) being one of the main ones, along with other insurance companies, provident funds, banks, mutual funds, and pension trusts.’

The largest housing financier in the nation, which will soon merge with private lender HDFC Bank, offered 10-year notes with a rate of 7.97%.

In an exchange notification, HDFC stated that the offering got 92 offers totaling Rs27.86 thousand crore, of which it kept 55 bids totaling Rs 25 thousand crore.

According to HDFC, the funds would be used to finance or refinance the corporation’s needs for its housing finance business.

According to Reuters’ story on Wednesday, long-term investors will probably absorb the sale despite its size, and that too without raising yields.

With 10-year notes with a 7.79% coupon, HDFC raised fewer than Rs 2 thousand crore in November. Rangan of HDFC commented on the rumors that this was the non-banking finance company’s (NBFC) final issue ‘The borrowing programs and the corporation’s lending operations are anticipated to carry on as usual till the merger takes effect. The funds come from the corporation’s routine borrowing program, which is used to fund its lending activities.’

According to merchant bankers who talked to ET, the majority of the money would go towards helping HDFC satisfy its capital needs following the merger, though part of it would also be used to purchase government bonds to assist it to meet its statutory liquidity ratio requirements.

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