HDFC to raise $1bn to maintain HDFC Bk stake

Housing Development Finance Corporation (HDFC) will be raising Rs 4,000 crore ($1 billion) debt to finance its stake purchase in HDFC Bank. The debt will be raised over 18 months.

HDFC Bank recently announced the acquisition of Centurion Bank of Punjab in an all-stock deal. Following this, HDFC Bank announced a private placement of equity to HDFC to enable the mortgage lender to maintain its stake at the current level of 23.3%. This entails an investment of almost $ 1 billion by HDFC, sources said.

They, however, ruled out the possibility of an equity issue in the near future, and said HDFC will instead use the option of raising debt to finance its purchase.