HDFC Bank to raise up to Rs 24,000 cr from share sale

Shareholders will be asked to vote on the plan on January 19, the lender said

HDFC Bank Ltd, India's second-biggest lender by assets, said on Wednesday it would raise up to Rs 24,000 crore ($3.75 billion) to fund growth by selling shares to investors, including a preferential issue to its parent HDFC Ltd.

HDFC Bank, the most valuable in the sector with a market capitalisation of more than $76 billion, said in a statement its board had approved the fundraising plan on Wednesday. Shareholders will be asked to vote on the plan on January 19, the lender added.

As part of the planned fundraising, HDFC Bank will issue up to Rs 8,500 crore worth of shares to mortgage lender HDFC Ltd on a preferential basis, while the remainder will be raised via modes including American Depositary Receipts and a share sale in India to institutional investors.

 

HDFC Bank has the lowest bad-loan ratio among India's top banks and is an investor favourite with its consistent profit growth in a sector whose profitability has been burdened by a large amount of bad debt in their books.

The bank, which is also listed in New York, last raised Rs 9,766 crore in equity capital in 2015.

As of end-September, HDFC Bank had a capital adequacy ratio of 15.1 per cent against a regulatory requirement of 10.25 per cent. HDFC Bank is one of the three in India designated by the central bank as "too big to fail".

HDFC Bank shares gained as much as 1 percent, hitting a record high of Rs 1,903.1. The stock has risen 56 per cent this year, compared with a 28 per cent gain in the Nifty 50 index and a 41.5 per cent rise in the banking sector index.

($1 = 64.0650 Indian rupees)