Home >Companies >News >HDFC plans to raise up to 14,000 cr via share sale
HDFC becomes the latest to join other private lenders looking to tap capital markets to bolster their balance sheets (Photo: Mint)
HDFC becomes the latest to join other private lenders looking to tap capital markets to bolster their balance sheets (Photo: Mint)

HDFC plans to raise up to 14,000 cr via share sale

The money will be used for purposes including organic growth, acquisitions and to maintain sufficient liquidity, the country’s biggest mortgage lender said in a statement on Friday

Housing Development Finance Corp. (HDFC) plans to raise funds of up to 14,000 crore through the sale of shares or bonds, as financiers across the country seek to boost buffers amid the disruption caused by the coronavirus pandemic.

The money will be used for purposes including organic growth, acquisitions and to maintain sufficient liquidity, the country’s biggest mortgage lender said in a statement on Friday.

HDFC becomes the latest to join other private lenders including Yes Bank and IndusInd Bank, looking to tap capital markets to bolster their balance sheets from any sharp spike in bad loans from a virus-caused potential contraction for the first time in four decades.

Last month, Kotak Mahindra Bank raised close to 7,300 crore via the sale of shares to bolster capital buffers further.

HDFC is one of the top housing finance lenders with a capital adequacy ratio of 17.6% and has been able to skirt a festering shadow banking crisis that has weakened most of India’s financial sector.

Raising capital is crucial for Indian lenders already struggling with the highest bad loan ratio among major economies.

A Credit Suisse report from last month estimates Indian lenders need to raise nearly 1.5 trillion of capital, of which state banks will require about 97,500 crore.

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