HDFC board clears raising ₹57,000 crore through non-convertible debentures

HDFC Ltd on Monday said its board has approved raising funds through non-convertible debentures (NCDs) in tranches aggregating to ₹57,000 crores.

The board has cleared issuance of unsecured, redeemable, non-convertible debentures under a Shelf Placement Memorandum, aggregating ₹57,000 crores, in various tranches, on a private placement basis, HDFC said in a regulatory filing.

This is in accordance with the approval granted by the shareholders of the HDFC at the 45th annual general meeting held on June 30, 2022, it said.

The proposed entity will have a combined asset base of around ₹18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

Once the deal is effective, HDFC Bank will be 100% owned by public shareholders, and existing shareholders of HDFC will own 41% of the bank. Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares held.

Following the merger, the combined balance sheet will be ₹17.87 lakh crore and the net worth will be ₹3.3 lakh crore, as of the December 2021 balance sheet. As of April 1, 2022, the market capitalisation of HDFC Bank was ₹8.36 lakh crore and that of HDFC ₹4.46 lakh crore.

Post-merger HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.