Housing finance major, HDFC, will seek its shareholders’ approval next month for an increase in its borrowing limit to Rs 2,00,000 crore to fund its growing business requirements.
The overall borrowing by the country’s biggest home loan provider is capped at Rs 1,50,000 crore and the company is looking to increase this limit by Rs 50,000 crore.
HDFC would seek the shareholders’ approval for this increase in the borrowing limit at its upcoming Annual General Meeting (AGM) scheduled for July 8, it said in its AGM notice being sent to the shareholders.
HDFC shareholders, at an AGM held nearly three years ago on July 18, 2008, had approved a borrowing limit of Rs 1,50,000 crore at any point of time.
“As on March 31, 2011, the total borrowings of the Corporation amounted to Rs 1,15,410.48 crore,” HDFC said.
“In view of the growth in the business of the Corporation, it may be necessary for the Corporation to borrow monies from various sources consequent to which the amount outstanding could exceed the present limit of Rs 1,50,000 crore,” it added.
At the AGM, HDFC would also seek shareholders’ nod for re—appointment of Mr Keki Mistry as its Managing Director (with a designation of Vice Chairman and CEO) for a period of five years with effect from November 14, 2010.
Mr Mistry will be paid a salary in the range of Rs 6—10 lakh per month, besides commissions and other benefits, as per the proposals being put forth for shareholders’ approval.
Mr Mistry is being paid a salary of Rs 8,95,000 per month at present.
Among other resolutions being proposed at the AGM, HDFC will seek shareholders’ nod for re—appointment of former RBI Governor, Mr Bimal Jalan, as a director on its board, as also for grant of stock options to its employees and directors.
HDFC reported profit after tax of Rs 3,534.96 crore for the year ended March 31, 2011, up from Rs 2,826.49 crore in the previous fiscal.
Its loan disbursements grew by 20 per cent to Rs 60,314 crore in 2010—11, while loan approvals rose by 24 per cent to Rs 75,185 crore.