Housing Development Finance Corporation (HDFC), the country's largest mortgage lender, on Friday said it will raise up to Rs 5,000 crore by issuing bonds on a private placement basis to fund its long-term capital needs. The issue size of the bond issue is Rs 3,000 crore with an option to retain oversubscription up to Rs 2,000 crore.
"The company will issue secured redeemable non-convertible debentures of face value of Rs 10 lakh each," HDFC said in a filing to the Bombay Stock Exchange.
It will bear coupon rate of 7.50 per cent with tenure of 5 years. The minimum subscription limit is ten debentures of Rs 10 lakh each and in multiple of one debenture thereafter. In case of default in payment of Interest or principal redemption on the due dates, an additional interest of at least 2 per cent per annum over the coupon rate will be paid for the defaulting period by the corporation.
The objective of the issue is to augment the long-term resources of the corporation. The proceeds of the issue would be utilised for financing/ refinancing of the housing finance business requirements of the corporation.
The issue will open for subscription opens on January 7, 2020 and will close on the same day. The bonds, which have been rated 'AAA' both by Crisil and ICRA, will be listed on the Bombay Stock Exchange and National Stock Exchange. Axis Bank is the arranger of the proposed issue.
In a separate development, HDFC has reduced its retail prime lending rate (RPLR) on housing loans by 5 basis points with effect from January 6, 2020. The move, applicable for existing borrowers, followed list of lenders which have revised their loan prices downwards following a cumulative 1.35 per cent rate reductions by the Reserve Bank of India since February 2019.
Meanwhile, shares of HDFC closed Friday's trade at Rs 2454.75 apiece, down 0.46 per cent, on the Bombay Stock Exchange.
By Chitranjan Kumar