Comments
Mortgage lender HDFC Ltd on Monday said its board has approved raising funds through non-convertible debentures (NCDs) in tranches aggregating to ₹57,000 crore.
The board has cleared issuance of unsecured, redeemable, non-convertible debentures under a Shelf Placement Memorandum, aggregating ₹57,000 crore, in various tranches, on a private placement basis, HDFC said in a regulatory filing.
This is in accordance with the approval granted by the shareholders of the HDFC at the 45th annual general meeting held on June 30, 2022, it said.
Besides, it said, "the board has approved increase in the overall borrowing powers of the corporation from ₹6-lakh-crore to ₹6.50-lakh-crore, outstanding at any point of time and recommended the same for approval of the members of the corporation by way of postal ballot."
The decision was taken since the outstanding borrowings of HDFC as on date is approximately ₹5.70-lakh-crore and it would need to borrow further for its business purposes till the effective date of merger.
It is expected that the parent HDFC Ltd would merge into subsidiary HDFC Bank by the third quarter of the next financial year.
Termed as the biggest transaction in India's corporate history, HDFC Bank on April 2022 agreed to take over the biggest domestic mortgage lender in a deal valued at about $40 billion, creating a financial services titan.
The proposed entity will have a combined asset base of around ₹18-lakh-crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.
Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.
Following the merger, the combined balance sheet will be ₹17.87-lakh-crore and the net worth will be ₹3.3-lakh-crore, as of the December 2021 balance sheet. As of April 1, 2022, the market capitalisation of HDFC Bank was ₹8.36-lakh-crore ($110 billion) and that of HDFC ₹4.46-lakh-crore ($59 billion).
Post-merger HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.