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HDFC will raise up to ₹85,000 crore by issuing NCDs (non-convertible debentures) as Tier-II capital in the next 12 months.
The largest mortgage lending non-banking finance company will seek shareholders’ approval for this at its 38{+t}{+h} annual general meeting (AGM) scheduled for July 28.
The Board will propose to “issue redeemable non-convertible debentures (NCDs) secured or unsecured and/or any other hybrid instruments which can be classified as being Tier II capital for cash either at premium or discount to the face value, up to an aggregate amount not exceeding ₹85,000 crore during a period of one year commencing from the date of AGM, on a private placement basis,” an HDFC notice said.
HDFC will also raise ₹5,000 crore through qualified institutional placement (QIP), issuing a maximum of 3.65 crore equity shares. This will dilute up to 2.2 per cent of the expanded issued paid-up equity share capital of HDFC. The funds will be used for making provision for deferred tax liability (DTL), financing business growth and also to increase or retain its current stake in HDFC Bank.
HDFC’s stake in the bank — the country’s second largest private sector lender — has fallen to 21.63 per cent as on June 30, 2015, from 22.5 per cent as on September-end 2014. Further, shareholders’ approval would be sought to assign home loans up to ₹12,000 crore for 2014-15 to HDFC Bank as part of their agreement.
In its notice to its shareholders sent to the exchanges, HDFC also said it would seek shareholders’ approval “to appoint a director in place of Deepak S Parekh (Chairman of HDFC), who retires by rotation, and, being, eligible offers himself for reappointment.”
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