Housing Development Finance Corporation Ltd.’s board approved raising over Rs 11,000 crore by selling shares to a consortium of investors including private equity firm KKR and Singapore’s sovereign wealth fund GIC.
India’s largest mortgage lender will raise Rs 11,103.6 crore by issuing 6.4 crore shares at Rs 1,726.05 per share, according to its exchange filing. HDFC will allot shares to the following investors on a preferential basis:
The preferential allotment, which represents 3.87 percent of HDFC’s enhanced equity share capital post the issue, will be completed within 15 days of shareholders’ approval.
HDFC’s board has also approved raising Rs 1,896 crore via a qualified institutional placement. The QIP will be completed within 12 months of shareholders’ approval.
BloombergQuint had reported on Dec.15 that HDFC plans to raise up to Rs 12,800 crore from a consortium of lenders led by private equity firm KKR and Singapore’s sovereign wealth fund GIC.
Rationale For Fund Raising
Up to Rs 8,500 crore of the funds raised will be used to subscribe to the preferential allotment of its banking arm HDFC Bank Ltd.
The Keki Mistry-led HDFC wants to participate in HDFC Bank's institutional share sale to ensure that its stake does not fall. Along with its subsidiaries, HDFC owns 21 percent in the bank.
India’s largest mortgage lender will direct the rest of the amount raised to fund its new initiatives. It is exploring opportunities in health insurance with its subsidiary HDFC Ergo General Insurance Company. “We would like to be in health insurance in a big way. But that would require a reasonably large amount of investment,” HDFC Chief Executive Officer Keki Mistry had said at a press conference on Dec. 19.
The mortgage lender is also mulling the acquisition and resolution of stressed assets in the country’s beleaguered real estate sector.