The Housing Development Finance Corporation’s board of directors has approved fund raising to the tune of ₹5,000 crore along with warrants resulting in dilution of 2.2 per cent equity capital, according to a company filing with the BSE and the NSE. The mop-up includes issue of non-convertible debentures also.
The country’s largest mortgage lender will seek shareholder approval in its annual general meeting (AGM) scheduled for July 28. The warrant holder will be entitled to exchange the warrants with the equity shares of HDFC at a premium and in line with present norms, the notification to the exchanges said. The NCDs, together with the warrants, will be issued to qualified institutional buyers, it added.
The proceeds may mainly be used to increase stake in HDFC Bank to the pre-QIP level of 22.2 per cent. Earlier in the year, HDFC had not participated in HDFC Bank’s ₹10,000-crore QIP. Apart from increasing or retaining the current stake in HDFC Bank, the funds could also be used for making provision for deferred tax liability and financing business growth of the lending institution.