The country’s largest housing finance company, Housing Development Finance Corporation (HDFC), today said it had received approval of its directors to raise up to Rs 4,000 crore through qualified institutional placement (QIP) of secured redeemable non-convertible debentures (NCDs) and warrants.
“We have received an in-principle approval. The proceeds will be used for normal lending purposes. Last year, we disbursed loans worth Rs 30,000 crore. This year, we intend to grow faster,” said Keki Mistry, vice-chairman and managing director of HDFC.
Mistry said the NCDs would come with detachable warrants. There would be dilution of 3.5 per cent equity share capital if all warrants were fully exchanged for equity, he said.
The company said these were three-year debt papers with rates of 7.25-7.5 per cent. The warrant holder would be entitled to buy the company’s shares in the future. The premium to be paid while buying the shares will be determined at the time of issuance of the warrants. Both the NCDs and the warrants will be listed separately on stock exchanges. Both will be issued to qualified institutional buyers on a QIP basis.
“The final decision on the issue is subject to the shareholders’ approval at the annual general meeting on July 22. Only after that will the date of opening of the issue be decided,” said Mistry.
Of late, many Indian companies have raised capital through QIPs as capital markets have started showing signs of revival.
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Since the beginning of the fiscal year, as many as 32 companies have announced plans to raise Rs 40,000 crore through the QIP route.
However, these issuances are mostly through equity, unlike this debt issue of HDFC.