HDFC Bank Set To Launch Up To $2 Billion QIP Soon
HDFC Bank Ltd. informed stock exchanges on the evening of July 26 that it is considering an issue of securities to raise funds.
Earlier in the day BloombergQuint reported that the bank was expected to launch an up to $2-billion (Rs 13,750 crore) qualified institutional placement offer that evening, based on information shared by three people requesting anonymity.
The pricing was expected to be close to the current market price since the demand, especially from overseas investors, is firm even at the record price level, said one of the people cited above.
Shares of India's largest private bank by market value closed 0.72 percent higher at Rs 2,189.35 apiece on the BSE on July 26.
“...the Bank is considering an issue of equity shares/convertible securities/depository receipts pursuant to a qualified institutions placement/American depositary receipts/global depository receipts program or such other methods or combinations as may be decided by the board,” HDFC Bank said in a filing made after trading hours.
If, based on market conditions and other relevant considerations such an issue is decided on then the board or a committee will meet on July 31 to approve the issue price for allotment of securities, the filing said.
As announced in December 2017, HDFC Bank has had plans to mop up a over $3 billion (Rs 24,000 crore), of which nearly $1.25 billion (Rs 8,500 crore) came through a preferential placement to the parent HDFC Ltd earlier this month. It issued 3.91 crore to the parent at Rs 2,174.09 apiece to raise Rs 8,500 crore.
The remaining capital of up to $2 billion will now come via the proposed QIP.
“We expect that the capital raise will support HDFC Bank’s credit growth of 20-25 percent over the next few years,” Moody’s Investor Service had said earlier. “HDFC Bank is growing at a faster pace than other banks in India: its average loan growth has been 22 percent over the past three years, versus the system average of 6.5 percent.”