HDFC Bank plans to raise up to Rs 5,000 cr in capital via AT1 bonds

The lender will separately raise up to Rs 5,000 crore through infrastructure bonds carrying "AAA" rating.

HDFC Bank will raise up to Rs 5,000 crore through additional tier I bonds for capital adequacy and business growth. Care Ratings has given “AA+” rating to the lender’s Basel III compliant tier- I bonds.

India’s largest private bank will separately raise up to Rs 5,000 crore through infrastructure bonds carrying "AAA" rating.

The capital raising ability and a healthy proportion of Tier-I capital provide the bank with headroom to raise additional Tier-II capital to maintain high growth, Care said.

During the nine months ended December 31, 2021, the bank raised Basel III compliant AT1 notes of $ one billion (equivalent Rs 7,423 crore) from the overseas market. The bank reported a Capital Adequacy Ratio (CAR) of 19.53 per cent (Tier-I CAR: 18.37 per cent) and CET-I Ratio of 17.10 per cent, as on December 31, 2021.

The bank continues to maintain a comfortable buffer over the minimum regulatory requirement CAR of 11.70 per cent, due to the increased requirement on account of being identified as a Systemically Important Bank- Domestic, under Basel III.

State-owned Bank of Maharashtra (BoM) has raised Rs 290 crore through additional tier I bonds (AT1 bonds) at a coupon of 8.75 per cent. The base issue was for Rs 250 crore with a green-shoe option of Rs 750 crore. These AT1 bonds, a perpetual financial instrument, have a call option at the end of five years. Pune-based lender’s capital adequacy ratio stood at 14.85 per cent with tier I of 10.61 per cent at end of December 2021.