 "HDFC Bank rises on news of initiating share sale")
Shares of HDFC Bank are trading high by over 1% to Rs 1,080 on the BSE in the early deals after it initiated the process of raising Rs.10,000 crore from domestic qualified institutional investors and foreign investors on receiving a formal approval from the foreign investment promotion board (FIPB), based on media reports.
America Merrill Lynch, JPMorgan and Citibank are bankers to the issue.
Indian lenders are seeking to raise new equity capital to meet global banking rules and also build a buffer for an expected acceleration in credit growth.
HDFC Bank, which is also listed in New York, filed with the US regulator to sell 22 million American Depositary Shares. HDFC Bank's New York shares were trading at about $57.3 per share, and at that price the bank is set to raise as much as $1.3 billion.
Indian banks are estimated to require more than $100 billion of new capital by March 2019 to meet with the Basel III global banking industry rules. State-run lenders in India, which dominate the market, are typically less well capitalised compared with their private sector peers.
HDFC Bank has said it does not have any immediate capital requirement. However, the new funds will help support its growth and especially when the industry credit growth picks up from current multi-year lows.
The stock opened at Rs 1,070 and touched a high of Rs 1,092on the BSE. A total of 40,434 shares changed hands on the BSE so far.