Housing Development Finance Corporation (HDFC) plans to raise Rs13,200 crore through a preferential issue and private placement. It will also issue equity shares through Qualified Institutional Payment (QIP) to raise up to Rs1,896 crore.
HDFC’s committee of directors at its meeting today approved the “issuance of 6,43,29,882 equity shares if Rs2 each on a preferential basis”, HDFC said in a release to the stock exchanges today.
It will further issue such number of equity shares through Qualified Institutional Payment (QIP) to raise up to Rs1,896 crore
The fund raising would be subject to approval of the members of the Corporation, it added.
The meeting commenced at 8.45 am and concluded at 9.55 am.
In December, the largest private housing finance player had said it planned to raise capital of up to Rs13,000 crore through private placement, QIP or on a preferential basis in the next one year.
HDFC will also infuse up to Rs8,500 crore in its subsidiary HDFC Bank – in which it holds 21.01 per cent stake at present.
“The Committee of Directors of the Corporation at its meeting held today approved the issue of equity shares up to an aggregate amount not exceeding Rs13,000 crore through a combination of a Preferential Allotment and Qualified Institutions Placement, subject to shareholders’ approval through postal ballot,” HDFC said in a statement.
Keki Mistry, vice-chairman and CEO of HDFC had said apart from infusion in the bank, the capital raised would be used to buy more portfolios into the health insurance segment, investments in distressed real estate assets and other.
The preferential allotment will be made at a share price of Rs1,726.05 per share to 10 investors. The mortgage lender was trading at Rs1,761.25 at the end of trade on Friday. HDFC board also approved raising Rs1,896 crore through a Qualified Institutions Placement (QIP) which will be completed within 12 months.
HDFC will use the proceeds to invest up to Rs8,500 crore in HDFC Bank’s Rs 24,000 crore share sale so as to retain its stake at 21 per cent in the bank. It will also look at exploring inorganic opportunities in the health insurance sector and evaluate opportunities in the acquisition and resolution of stressed assets in the real estate sector.
“The Corporation will also need capital to sponsor funds it has set up to invest in the equity and mezzanine debt of affordable housing projects, support capital requirements of its subsidiary companies as and when required and capitalise on organic and inorganic growth opportunities in the affordable housing finance space,” the statement said.
The preferential allotment will be made to Waverly Pte. Ltd (an affiliate of GIC), OMERS Administration Corporation, the administrator of the pension plan for Ontario’s municipal employees (OMERS), Canada, Silverview Investments Pte Ltd. (an affiliate of global investment firm KKR), Carmignac Group, France (represented through five entities – Carmignac Investissement, Carmignac Portfolio Investissement, Carmignac Portfolio Investissement Latitude, Carmignac Patrimoine and Carmignac Portfolio Patrimoine); and Premji Invest represented through Azim Premji Trust, India and PI Opportunities Fund – I, India.