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| Fin players hasten to raise funds |
| BS Reporter / Mumbai Aug 18, 2009, 00:35 IST |
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Fearing rise in rates, L&T Finance, HDFC and Canara Bank line up debt issues.
 One large public sector bank and two non-banking financiers, including L&T Finance, are raising funds on expectation that interest rates will rise in the future.
L&T Finance, the financial services arm of construction and engineering giant L&T, will open its non-convertible debenture (NCD) issue tomorrow. The non-banking finance company (NBFC) plans to raise up to Rs 1,000 crore. The issue closes on September 4, 2009.
YM Deosthalee, chief financial officer, L&T, and a director on the board of L&T Finance, said, “We feel there is a good demand for such a product. We will use this capital to fund growth.”
Up to 35 per cent of the issue is reserved for retail investors, up to 30 per cent for non-institutional investors and up to 35 per cent for qualified institutional buyers.
Deosthalee said the group had not finalised any time-frame for an IPO. “But somewhere in the future, there might be some unlocking. There is a possibility, but not in the near future,” he added.
The country’s largest mortgage financier, HDFC, is also expected to announce details of a private placement of NCDs. The lender plans to raise up to Rs 4,000 crore this fiscal through the qualified institutional placement (QIP) route.
Public sector Canara Bank has also announced its intention to raise up to Rs 600 crore Tier-1 capital through issue of unsecured non-convertible subordinate perpetual bonds. The capital will be used to strengthen the lender’s long-term resources and enhance its capital adequacy.
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