HDFC gains after finalising plan to raise funds

HDFC rose 1.15% to Rs 1,781.50 at 9:35 IST on BSE after the company's committee of directors approved raising upto Rs 13000 crore through a combination of a preferential allotment and qualified institutions placement.

The announcement was made on Saturday, 13 January 2018.

Meanwhile, the S&P BSE Sensex was up 200.45 points, or 0.58% to 34,792.84.

On the BSE, 31,000 shares were traded in the counter so far, compared with average daily volumes of 2.24 lakh shares in the past two weeks. The stock had hit a high of Rs 1,796.70 and a low of Rs 1,780 so far during the day. The stock hit a record high of Rs 1,804.50 on 7 November 2017. The stock hit a 52-week low of Rs 1,222 on 13 January 2017.

Housing finance major HDFC said its committee of directors approved issuing equity shares up to an aggregate amount not exceeding Rs 13000 crore through a combination of a preferential allotment and qualified institutions placement, subject to shareholders' approval through postal ballot.

The committee of directors of HDFC approved issuing 6.43 crore equity shares of face value of 2 per share at Rs 1,726.05 per share on a preferential allotment basis to 10 investors. The aggregate capital infusion through the preferential allotment will be Rs 11,104 crore. The preferential allotment represents 3.87% of HDFC's enhanced equity share capital post the issue.

The committee of directors also recommended the issue of equity shares under a qualified institutions placement (QIP) basis for an amount not exceeding Rs 1896 crore.

As mentioned earlier, the key objective of raising capital is to participate in the preferential issue of HDFC Bank up to an amount not exceeding Rs 8500 crore. This would enable HDFC to maintain its current shareholding in HDFC Bank.

HDFC is also exploring inorganic opportunities in the health insurance sector in conjunction with its subsidiary, HDFC ERGO General Insurance Company and is evaluating opportunities in the acquisition and resolution of stressed assets in the real estate sector. HDFC will also need capital to sponsor funds it has set up to invest in the equity and mezzanine debt of affordable housing projects, support capital requirements of its subsidiary companies as and when required and capitalise on organic and inorganic growth opportunities in the affordable housing finance space.

On a consolidated basis, HDFC's net profit rose 17.3% to Rs 2869.41 crore on 14.15% growth in total income to Rs 16583.10 crore in Q2 September 2017 over Q2 September 2016.

HDFC is India's first retail housing finance company and is currently one of the largest originators of housing loans in the country.

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