HDFC Bank raises Rs 10,000 cr from ADRs, QIP offering

HDFC Bank today raised about Rs 10,000 crore by selling American Depository Receipts and India-listed shares to qualified institutional investors in the largest follow-on offer by a private sector firm.
As per an US Securities and Exchange Commission filing, the company has raised USD 1,270.72 million (about Rs 8,000 crore) by issuing 22 million ADS to the global investors.
The bank had approved a issue price of USD 57.76 per ADR to eligible investors in the ADR Offering.
Besides, the bank has raised about Rs 2,000 crore from a QIP (Qualified Institutional Placement) in the domestic market.
The issue price for QIP was Rs 1,067 per share to be allotted to eligible qualified institutional buyers.

"...We intend to use the net proceeds of the (ADR) offering, together with the net proceeds of the QIP of approximately Rs 1,984.99 crore for meeting capital requirements in accordance with the capital adequacy norms and ensuring adequate capital to support growth and expansion," the filing said.

The bank would use proceeds for enhancing solvency and capital adequacy ratio and general corporate purposes.
Last month, the government had allowed increasing foreign holding in HDFC Bank. The application was pending for over a year.
Parent HDFC holds 22.47 per cent in the bank, FIIs 33.75 per cent, ADRs/GDRs 16.84 per cent and the rest is held by others, as of the September quarter.

With over Rs 2.6 trillion market capitalisation, HDFC Bank trumps all other lenders in the country including SBI and ICICI.
With the twin share sale, the FII limit in the bank would hit regulatory cap of 74 per cent.
Total foreign investment in HDFC Bank was 73.39 per cent at the end of June 2014. It had come down to 73.2 per cent at the end of September.
In December 2013, the Reserve Bank had prevented FIIs from holding more HDFC Bank stocks after their combined stake crossed 49 per cent.
HDFC Bank's scrip settled at Rs 1,077.25, a gain of 0.94 per cent, on the BSE.