HDFC plans to raise up to ₹13,000 crore
Housing Development Finance Corp. Ltd (HDFC) is planning to raise up to ₹13,000 crore as it seeks to maintain its shareholding in its subsidiary HDFC Bank Ltd and bolster its capital base to meet the growing demand for home loans.
The fund raise will be either through fresh equity issue or convertible debentures or both, HDFC said in a stock exchange notice. The last time it raised funds through an equity issue was in 2007.
India’s largest and oldest mortgage lender will infuse ₹8,500 crore in HDFC Bank, which is launching a preferential sales of shares. Participating in this share sale will allow HDFC to maintain its 21% shareholding in the banking unit.
An HDFC Bank spokesperson declined to comment on the fund-raising programme of the bank and said its board is meeting on Wednesday.
HDFC’s fund raise will also allow the mortgage lender to grow its affordable housing and health insurance business, said Keki Mistry, its vice-chairman and chief executive.
“We will be considering inorganic opportunities in the housing finance business. The hous- ing business offers huge growth opportunities due to under-penetration of housing and a young population. We also have an affordable housing fund that will require funding,” Mistry said.
The NBFC is also planning to venture into the health insurance business, partnering its general insurance subsidiary HDFC Ergo General Insurance Co. Ltd.
“We see massive opportunity in the health insurance space. We are currently not there in the health insurance sector and would like to get there in big way. We will do that in conjunction with HDFC Ergo General Insurance. But that would require a large amount of capital,” said Mistry.