InvestorQ : Why has HDFC raised a sum of Rs.5000 crore from a bond issue?
swati Bakhda made post

Why has HDFC raised a sum of Rs.5000 crore from a bond issue?

Sam Eswaran answered.
3 years ago

India’s largest housing finance company, HDFC, will raise close to Rs.5000 crore by issuing debt instruments on a private placement basis to HNIs and qualified institutional players. HDFC will issue secured redeemable NCDs of Rs.2500 crore.

However, the bond issue will also have an option to retain oversubscription of another Rs.2500 crore, taking the total amount to Rs.5000 crore. With the demand expected to be robust for the paper, it is almost certain that HDFC will use the green shoe option too.

The main purpose of this fund raising is to augment long-term resources of the company and be prepared with a treasury chest when the demand for home loans picks up once again. HDFC will offer coupon of 6.43% and the NCD will be redeemed in the year 2025.

The bids for the non-convertible debentures will open for subscription on September 25 and close on the same day. The HDFC stock has been a rank underperformer in last few months and would want to ensure that the stock price better reflects its property holdings.