InvestorQ : Why is HDFC planning to raise Rs.5,000 crore through the issue of bonds to investors?
diksha shah made post

Why is HDFC planning to raise Rs.5,000 crore through the issue of bonds to investors?

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swati Bakhda answered.
1 month ago
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Housing Development Finance Company or HDFC, which is India’s largest mortgage lender, proposes to raise a total sum of Rs.5,000 crore through the issue of non-convertible debentures or NCDs. These NCDs will be sold on a private placement basis to qualified institutional buyers in India and also abroad.

HDFC paper normally has strong demand in the market even through the yields are relatively lower due to the high safety factor associated with the company. The issue is expected to remain open on 05-March, Friday, and will also close on the same day since it is a purely QIB placement on private basis.

The issue will have a base size of Rs.2000 crore but it will also have an attached green-shoe option to retail an additional Rs.3,000 crore in the event of excess subscription received. HDFC needs a continuous flow funds coming into its war chest to augment long-term resources on a sustained basis. The funds will be deployed for financing and refinancing in the home loans segment. Bonds will mature in Mar-23 and carry annual coupon of 5.30%.

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