HDFC launches bond sale worth Rs 25,000 cr to meet biz requirements

Leading housing finance firm HDFC Ltd has launched a bond sale worth Rs 25,000 crore, marking the largest ever debt issuance plan by an Indian company.

"We launched a Rs 5,000-crore NCD (non-convertible debenture) issuance with a green-shoe option of up to Rs 20,000 crore through the electronic bidding platform. This amount is being raised to meet our business requirements," V S Rangan, executive director of HDFC Ltd, told Business Standard.

Debt capital market officials said the HDFC bonds were of 10-year maturity and the expectation for the coupon — the rate of interest paid to investors — was around 7.97 per cent.

The 10-year benchmark government bond settled at 7.37 per cent yield on Tuesday.

HDFC’s planned fundraising this week comes ahead of the company’s merger with HDFC Bank. In April 2022, HDFC Bank said it would take over HDFC in a deal valued at $40 billion. 

The merger was initially to be completed by the second or third quarter of the next financial year. 

Top officials of the bank later said the merger could be completed before schedule, with some analysts expecting the process to be implemented by the end of April-June.

In December 2022, HDFC Bank raised Rs 15,000 crore through the issuance of tier-2 bonds, marking the largest sale by any bank in the current financial year.

Last month, Reuters reported that after a gap of a couple of months, the housing finance company had planned to raise Rs 3,000 crore through the issuance of 10-year securities. The company had issued Rs 1,900 crore worth of 10-year bonds in November 2022.