 "Enforcing contracts, resolving insolvency weakest links")
Private sector HDFC ERGO General Insurance Company on Monday said it has raised Rs 350 crore through Non-Convertible Debentures (NCDs) to strengthen its capital base.
The fund was raised by way of the private placement of unsecured, subordinated, redeemable, NCDs of face value Rs 10 lakh each, HDFC ERGO said in a statement.
The NCDs were issued in November with a coupon rate of 7.6%.
It is listed on the BSE and has a tenure of 10 years with a call option at the end of 5 years.
Commenting on the announcement, HDFC ERGO General Insurance CEO Ritesh Kumar said the fundraising comes soon after the acquisition of L&T General Insurance and this will strengthen the financial position of the company and pave the path for future growth.
Since insurance is a capital-intensive business, subordinated debt capital plays a significant role.
Insurers, like banks, too are now allowed to raise subordinated debt under IRDAI's other forms of capital Regulations.
