HDFC Intends To Raise Rs 10,000 Cr

High residential sales are boosting demand for home loans, which is being met by India’s largest mortgage lender, HDFC

High residential sales are boosting demand for home loans, which is being met by India’s largest mortgage lender, HDFC. 

People familiar with the matter said that the home loan is in advanced talks with investors, including Axis Bank and ICICI Bank. 

There is an intention to raise a minimum of Rs 5000 crore, with the possibility of raising up to Rs 10,000 crore in the event of higher demand for the bonds.

 The sources said a total of Rs 2500 crore may be subscribed by both private banks but the exact size of the subscription will depend on other institutional investors.

 A 10-year bond with a 7.8 per cent yield will go up for scale either later this week or early next week, according to the people.

 Buy offering bonds with a 10 year maturity, HDFC was able to raise Rs 11,000 crore on 26 July.

 On Tuesday, the sovereign gauge yielded 7.19 per cent compared with 7.35 per cent at that time.

 In accordance with the latest yield guidance, the differential remains in the range of 65 to 70 basis points over the bench mark.

 Through perpetual bonds, Bank of Baroda raised Rs 2474 crore on Tuesday with 7.88 per cent.

 A merger between HDFC and HDFC Bank is currently taking place.

 The merger proposal was approved by the Competition Commission of India two weeks ago. Syndicated loans helped HDFC raise USD 1.1 billion in early August.

 As a result of strong loan demand from individuals as well as from the dividend income from subsidiaries, the housing finance company’s first quarter net profit was raised by 22 per cent to Rs 3,669 crore.

 An increase of 19 per cent in the amount of individual loans accounted for 79 per cent of AUM, which grew to Rs 6.71 lakh crore from Rs 5.74 lakh crore in the previous year.

HDFC’s stock rose 3.37 per cent on Tuesday, closing at Rs 2446.20 on the BSE.