HDFC Bank To Raise Rs 50,000 Crore Via Bonds Over Next 12 Months

The proposed fundraise would be by issuing perpetual debt instruments, or Additional Tier-1 (AT-1) bonds, Tier-II capital bonds, and long-term bonds

HDFC Bank's board of directors will consider the fundraising proposal on April 15, 2023.

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HDFC Bank on Tuesday announced that it is planning to raise up to Rs 50,000 crore in funds via the issuance of bonds, over the next 12 months. In an exchange filing, the private lenders said that the proposal would be taken up for consideration by the board of directors during a meeting scheduled on April 15. 

HDFC said, "...we wish to inform you that the Bank proposes to raise funds by issuing Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long-Term Bonds (Financing of Infrastructure and Affordable Housing) up to total amount of Rs. 50,000 crores over the period of next twelve months through private placement mode."

"The Board of Directors would consider this proposal at its ensuing Board meeting to be held on April 15, 2023," the filing added. 

The disclosure comes about a week after the lender provided an update on its operations for Q4. HDFC Bank had reported its profit rose 17 per cent year-on-year, while deposits gained 21 per cent in the three-month period ending March 2023.

The fundraising announcement also comes amid HDFC Bank's merger with Housing Development Finance Corp Ltd (HDFC), which is likely to be completed by the end of June.

Last month, HDFC announced the plans to raise another Rs 57,000 crore through the issue of non-convertible debentures (NCD). The company said that the fund raising will be done through multiple tranches.

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.