Mortgage lender HDFC raises over Rs 13,000 cr through 10-year bonds

Mortgage lender Housing Development Finance Corporation (HDFC) has raised over Rs 13,000 crore through 10-year bonds at 7.75 per cent ahead of its merger with the largest private lender, HDFC Bank.

Bond-market sources said the base issue size for non-convertible debentures (NCDs) was Rs 10,000 crore with the greenshoe option to raise another Rs 10,000 crore.

The mortgage lender decided to raise only Rs 3,187 crore above the base issue, reflecting market conditions after the Reserve Bank of India’s (RBI’s) decision to retain the policy repo rate at 6.5 per cent.

This is one of the first large-size issues after the June monetary policy review by the RBI’s monetary policy committee. Liquidity requirements also weighed on deciding the amount to be raised ahead of the merger with HDFC Bank, expected in the next few months, bond dealers said.

CRISIL has rated the NCDs “AAA\stable”.

The ratings continue to reckon on the leading market position and sound track record of HDFC, its healthy asset quality, a diversified and stable resource profile, and a strong financial risk profile. These strengths are partially offset by exposure to intense competition in housing finance.

For FY23, its net profit grew by 18 per cent at Rs 16,239 crore as against Rs 13,742 crore in FY22.

Assets under management grew by 10.71 per cent to more than Rs 7.23 trillion at the end of March 2023 as against about Rs 6.54 trillion in the previous year. Individual loans comprised 83 per cent of the assets under management.