👍HDFC raises Rs 25,000 cr in largest-ever local bond issue | The Financial Express

Clipped from: https://www.financialexpress.com/industry/banking-finance/hdfc-raises-rs-25000-cr-in-largest-ever-local-bond-issue/2983930/

HDFC had set an issue size of Rs 5,000 crore for the issue, with an option to retain oversubscription of Rs 20,000 crore.

HDFC had set an issue size of Rs 5,000 crore for the issue, with an option to retain oversubscription of Rs 20,000 crore. (File)

Housing Development Finance Corporation (HDFC) on Thursday raised Rs 25,000 crore in the country’s largest privately-placed corporate bond issue on a private placement basis.

The non-convertible debenture (NCD) issue witnessed participation from across investor categories, with LIC (Life Insurance Corp) being one of the largest ones, along with other insurers, provident funds, banks, mutual funds and pension trusts. The company received 92 bids amounting to Rs 27,863 crore on the electronic bidding platform and retained accepted 55 bids worth Rs 25,000 crore.  

HDFC had set an issue size of Rs 5,000 crore for the issue, with an option to retain oversubscription of Rs 20,000 crore. The bonds carry a coupon of 7.97% a year, translating to a spread of 49 bps over Wednesday’s close of 10-year government bond yield.

“The benchmark transaction in times of tougher systemic liquidity is indicative of the extent of investor interest and confidence in the group,” the company said. HDFC is planning to use the funds for its housing finance requirements and augmenting long-term resources. The demand for housing is expected to remain strong and investor support in long-term financing aids allocation of resources towards on-lending to the sector, VS Rangan, executive director, HDFC, said.

Axis Bank, ICICI Bank, HDFC Bank and ICICI Securities Primary Dealership are the arrangers to the issue. The merger-bound company has raised Rs 53,415 crore via bond issues so far in the current financial year, according to information with Prime Database. The merger with HDFC Bank is likely to generate an SLR requirement in order to cover assets of HDFC that will be added to the bank’s balance sheet.

The merger of the company with HDFC Bank is pending approval from the National Company Law Tribunal and is likely to be completed by July, Keki Mistry, vice chairman and CEO, HDFC, had said in an earlier interaction. After the NCLT gives its approval to the merger, the scheme needs to be approved by other regulators, including the Reserve Bank of India and Securities and Exchange Board of India.