InvestorQ : When is HDFC Bank planning to raise the sum of Rs.50,000 crore via bonds?
Sam Eswaran made post

When is HDFC Bank planning to raise the sum of Rs.50,000 crore via bonds?

Answer
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swati Bakhda answered.
2 months ago


As has been stated earlier by the bank, HDFC bank proposes to raise nearly Rs.50,000 crore via a mix of AT1 bonds and infrastructure bonds. AT1 bonds or Additional Tier-1 bonds are quasi equity and are perpetual in nature without any fixed maturity time frame. These bonds had recently been in some controversy in the Yes Bank default case.

HDFC Bank also has plans to use part of this money so raised by the AT1 bonds route to buy out the home loan portfolio of HDFC to the tune of Rs.28,000 crore. This gives some leeway to HDFC bank in ensuring it adds a high quality portfolio of retail assets. The AT1 bonds rank at par with equity as tier-1 capital and there is only interest payable on such bonds.

The overall debt component will be raised through unsecured, perpetual debt instruments. Total capital adequacy of the bank stood at 18.5%, which is well ahead of the basic statutory requirement of 11.075%. HDFC Bank has a share of 9.93% of the total advances in the banking system and this spruced up capital base will allow further expansion.