HDFC raises Rs 4.3k cr in warrants, NCDs

The instruments will be listed on BSE, NSE.

Housing Development Finance Corporation (HDFC) on Thursday announced that it had simultaneously issued warrants of Rs 301 crore and non-convertible debentures (NCDs) worth Rs 4,000 crore through the qualified institutional placement (QIP) route.

The 10.95 million warrants, priced at Rs 275 each, entitle the holder to convert each of them into a single equity share of the corporation within three years from the date of allotment at an exercise price of Rs 3,000 a share.

So, if a holder decides to convert his warrant into equity, the total amount paid per share would work out to Rs 3,275, a premium of 46 per cent to the closing price on August 17 — the date of the launch.

In a statement, the company said the maximum dilution that could take place if all the warrants were swapped for equity shares would be up to 3.5 per cent of the expanded equity share capital of HDFC.

The company has also issued NCDs worth Rs 4,000 crore. Out of the total Rs 4,000 crore, Rs 2,000 crore was raised through zero coupon NCDs with a maturity of two years an annualised yield of 7.15 per cent.

The remaining amount was raised through NCDs with a maturity period of three years, having an annualised yield of 7.85 per cent.

“The composite cost of funds to the corporation as a result of the simultaneous issue of warrants and NCDs will be 4.25 per cent per annum,” HDFC said in a statement. The NCDs and warrants will be issued only to domestic qualified institutional buyers (QIBs) and will be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The lead managers for the warrants were Citigroup Global Markets, Goldman Sachs, JM Financial, Kotak Mahindra Capital and Nomura.

The lead managers for the NCDs were Axis Bank, Citigroup Global Markets, HSBC, JM Financial and Kotak Mahindra Capital.