Housing Development Finance Corporation Ltd (HDFC) is set to raise $100 million of external commercial borrowing (ECB).
The housing finance major has already received the Reserve Bank of India approval for the issue.
Conrad D'Souza, general manager - treasury, said the approval will remain valid for the next three months and, hence, HDFC will have to hit the market by that time. State Bank of India is the sole arranger to the issue.
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D'Souza, said : "This is to fund our normal business. We have a requirement of funds of Rs 7,500 crore funds in this fiscal for our operations and the ECB issue will be bring a part of it."
Of its Rs 7,500 crore requirement, the housing finance company will receive Rs 3,000 crore by way of loan repayments, while the balance will be raised from the market -- both external and domestic.
"There is nothing special in this issue, we have accessed the overseas market from time to time for funds and the coming issue will be one of them," D'Souza said.
HDFC has availed of foreign currency borrowing from various international institutions in the last fiscal.
The list includes International Bank for Reconstruction and Development ($250 million), International Finance Corporation, Washington ($40 million), United States Agency for International Development ($125 million), Commonwealth Development Corporation (pound sterling 25 million) and Asian Development Bank ($120 million under two projects).
It has received the approval for another $80 million loan from Asian Development Bank. As on March 31 HDFC's net foreign currency exposure in respect of its borrowing stood at $5.93 million.
Earlier in the fiscal there were a spate of ECB issues in the market. Larsen & Toubro, ICICI, Tata Steel, Reliance Petroleum and NTPC were the major corporates who have accessed the market.
The total amount raised by the corporates was of $850 million. The mad rush for forex resource raising was to beat the May 31 deadline after which the ECBs is subjected to withholding tax. However, this was not applicable for housing finance companies.