HDFC hits record high as board approves Rs 130 billion fund raising plan

The stock hit lifetime high of Rs 1,832, up 4% on BSE after its board approved fund raising worth Rs 130 billion through a combination of a preferential allotment and QIP.

Housing Development Finance Corporation (HDFC) hit lifetime high of Rs 1,832, up 4% on BSE after its board approved fund raising worth Rs 130 billion through a combination of a preferential allotment and Qualified Institutions Placement (QIP). The stock surpassed its previous high of Rs 1,805 touched on November 7, 2017 in intra-day trade.

The board approved issuance 64.33 million shares of face value of Rs 2 each on a preferential basis at a price of Rs 1726.05 per share, aggregating to Rs 111 billion to various investors including Azim Premji Trust.

A total of 30 million shares will be issued to an affiliate of GIC Waverly Pte, 10 million shares to the administrator of the pension plan for Ontario's municipal employees (OMERS) of Canada and about 9.2 million shares to KKR firm Silverview Investment Pte, it said.

The board also approved the issuance of such number of shares of face value of Rs 2 each through QIP such that the total amount to be raised shall not exceed Rs 18.96 billion, subject to approval.

"The key objective of raising capital is to participate in the preferential issue of HDFC Bank up to an amount not exceeding Rs 85 billion. This would enable the Corporation to maintain its current shareholding in HDFC Bank," HDFC said in a press release.

The Corporation is also exploring inorganic opportunities in the health insurance sector in conjunction with its subsidiary HDFC ERGO General Insurance Company and is evaluating opportunities in the acquisition and resolution of stressed assets in the real estate sector, it said.

"The Corporation will also need capital to sponsor funds it has set up to invest in the equity and mezzanine debt of affordable housing projects, support capital requirements of its subsidiary companies as and when required and capitalise on organic and inorganic growth opportunities in the affordable housing finance space," it added.