HDFC Board To Raise Rs 57,000 Crore Via Private Placement Ahead Of Merger With HDFC Bank

HDFC Board To Raise Rs 57,000 Crore Via Private Placement Ahead Of Merger With HDFC Bank

The board of mortgage lending major Housing Development Finance Corporation (HDFC) has approved plans to raise another Rs 57,000 crore through the issue of non-convertible debentures (NCD), ahead of the merger with HDFC Bank. The company said that the fund raising will be done through multiple tranches.

This is the second major fundraising announced by HDFC in the past two months. On February 26, the mortgage lending company raised Rs 25,000 crore through bonds at 7.97 per cent coupon rate, which was the country’s largest-ever bond issue.

The merger between HDFC-HDFC Bank is all set to take effect by June-July after receiving the necessary approvals from various regulatory authorities. The merger was announced in April last year.

“Increase in the overall borrowing powers of the Corporation from Rs. 6.00 lakh crore to Rs. 6.50 lakh crore, outstanding at any point of time and recommended the same for approval of the Members of the Corporation by way of postal ballot,” the company said in the release. Also, it said that the said decision was taken since the outstanding borrowings of the corporation as on date is about Rs 5.70 lakh crore and the Corporation would need to borrow further for its business purposes till the effective merger date.

The National Company Law Tribunal’s (NCLT’s) Mumbai Bench in mid-March approved the merger of mortgage financier HDFC Ltd into HDFC Bank, paving the way for one of the largest financial behemoths in India. The merger already has approvals from the Securities and Exchange Board of India (Sebi) and the Competition Commission of India (CCI), shareholders of both entities. It has also approval from the Reserve Bank of India (RBI) and the two stock exchanges.

On March 17, the company said its board would consider raising funds through NCDs in tranches aggregating to Rs 57,000 crore.

In April last year, HDFC said its board has approved the merger of its wholly-owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited. As part of the plan, HDFC will acquire a 41 per cent stake in HDFC Bank through the transformational merger.

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