HDFC to raise up to ₹8,000 crore via 5-year bonds at 7.7%

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Housing Development Finance Corporation (HDFC) is planning to raise up to Rs 8,000 crore via a 5-year bond issue carrying a coupon of 7.7 per cent, the company informed the bourses on Monday.

Basic issue size of Rs. 3,000 crore and option to hold orders of up to Rs. 5,000 crore.

The senior unsecured, non-convertible notes (NCDs) will be issued on a private placement basis and are due to mature on May 16, 2028. The notes are rated “AAA” by CRISIL and ICRA.

The aim of this issue is to increase the long-term resources of the enterprise. HDFC said the proceeds from the current issue will be used to finance/refinance the requirements of the housing finance business.

The minimum subscription for this issue is set at 100 non-infectious cases at a value of 1 lakh per dollar. Axis Bank is the regulator of the case.

HDFC’s board of directors, in March, approved an increase of up to Rs 57,000 crore across debentures, in multiple tranches, for commercial purposes up to the effective date of the merger.

HDFC is raising long-term funds to help HDFC Bank comply with regulatory guidelines on maintaining CRR (cash reserve ratio), SLR (statutory liquidity ratio), and LCR (liquidity coverage ratio), post-merger.

The Reserve Bank of India required private lenders to meet regulatory ratios from day one of the merger, which is expected to be completed by July.