HDFC approved issuance of NCDs worth Rs 57,000 cr ahead of its merger with HDFC Bank

Housing Development Finance Corp Ltd

The board of Housing Development Finance Corp Ltd approved the issue of redeemable non-convertible debentures worth Rs 57,000 crore in various tranches on Monday.

The board also approved an increase of HDFC’s borrowing capacity from Rs 6 lakh crore to Rs 6.5 lakh crore. As of today, HDFC’s outstanding borrowing totals Rs 5.7 lakh crore.

“The said decision was taken since the outstanding borrowings of the Corporation as on date is approx. Rs. 5.70 lac crore and the Corporation would need to borrow further for its business purposes till the effective date of merger (with HDFC Bank Ltd),” said HDFC said in a stock exchange filing.

The Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), HDFC and HDFC Bank shareholders, the Pension Fund Regulatory and Development Authority (PFRDA), and the Competition Commission of India had previously granted HDFC the necessary approvals (CCI).

The HDFC-HDFC Bank merger, announced on April 4, 2022, is regarded as one of the largest in Indian corporate history. In terms of market value, the merger is expected to produce the third largest firm in the country, with the combined entity expected to have a combined asset base of roughly Rs 18 lakh crore. Following the completion of the transaction and merger, existing HDFC shareholders will own 41% of the bank.

Also Read | HDFC implements offline digital payments under sandbox of RBI

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