Mortgage finance major Housing Development Finance Corporation mopped up ₹5,051.1 crore through a simultaneous issue of non-convertible debentures and warrants in a qualified institutional placement to domestic institutional investors.

The debenture issue consisted of 5,000 secured redeemable NCDs of face value ₹1 crore each offering an annual coupon rate of 1.43 per cent and maturing on March 28, 2017. The issue is rated AAA by CRISIL.

The company also garnered ₹51.1 crore by issuing 3.65 crore warrants at an issue price of ₹14 each. The buyer of the warrant has the right to exchange one warrant for one equity share of HDFC of face value ₹2 within three years from the date of allotment — October 5, 2015. The exercise price of the warrant is ₹1,475 an equity share.

The issue price of ₹14 is neither adjustable with the warrant exercise price nor refundable by the corporation, an HDFC statement said.

In case a warrant-holder exercises the option to purchase HDFC’s shares, the total amount paid would be ₹1,489 per share — a premium of 25.16 per cent over the SEBI floor price of ₹1,189.66 as on September 30, 2015. Assuming all warrants are exercised by its buyers in the next three years, HDFC would receive an additional amount of ₹5,383.75 crore by way of equity capital and share premium. The maximum possible issue size would be ₹10,434.85 crore. In addition, the maximum equity dilution would be up to 2.2 per cent of the enhanced equity capital of HDFC.

Listed on the NSE and the BSE, the instrument notched up a yield-to-maturity of 8.65 per cent on the NSE. Yield-to-maturity is the total yield given by a debt instrument on redemption at maturity. This assumes that an investor will hold the instrument until maturity and reinvests all annual coupon payments.

On Tuesday the HDFC scrip closed at ₹1,258.1, up 0.17 per cent, on the BSE.

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