HDFC Bank, which is the largest private-sector bank in the country, has recently launched a share sale to raise a sum of Rs.15,500 crore from foreign and domestic institutional investors. The lender informed the stock exchanges that this fundraiser will include a mix of American depository receipts (ADR) and qualified institutional placement (QIP). Domestic institutional investors alone will be participating in the qualified institutional placement.
Various banks in India have been raising funds during the past 12 – 18 months, with several state-owned and private-sector banks making several large QIP offerings. In the last financial year, State Bank of India (SBI) and Kotak Mahindra Bank raised Rs.15,000 crore and Rs.5,803 crore through qualified institutional placement, respectively.
In December 2017, HDFC Bank announced that it was planning to raise a sum of Rs.24,000 crore through a mix of QIP and preferential allotment. In July 2018, the lender raised a sum of Rs.8,500 crore from HDFC Ltd. via preferential allotment. In February 2015, HDFC Bank raised a sum of Rs.10,000 crore through both ADRs and QIP.
For the current share sale, HDFC Bank has fixed a floor price of Rs.2,179.13 for the qualified institutional placement. The lender will be using the funds to support its growth and expansion plans, strengthen the capital structure, and enhance the capital adequacy ratio and solvency. Credit Suisse, JP Morgan, DSP Merrill Lynch, Morgan Stanley, etc., are in charge of managing the bank’s share sale.
Sources: Livemint, The Economic Times