HDFC raises money through NCDs and warrants

In a first, mortgage major HDFC today said it has raised money in a combined issue involving a low-cost non-convertible debentures issue of Rs 5,000 crore, and sale of warrants which opens up a possibility to shore up capital by Rs 5,384 crore in near future.
"Total amount we have received is Rs 5,051 crore, including Rs 5,000 crore from the NCD and Rs 51 crore is the face value of the warrants, which on conversion will get us an additional Rs 5,384 crore," its vice chairman and chief executive Keki Mistry told reporters.
Mistry said money raised through NCD issue will be deployed for regular lending purposes while the conversion of warrants will beef-up the capital, which is currently at "reasonably comfortable" levels in the future.

"The advantage of this instrument is that it gives us the ability to generate money today and generate capital at a future date," he said, adding that the need for capital can be necessitated due to a variety of reasons including balance sheet growth and also maintaining its stake in HDFC Bank.
He added that the NCD issue, which saw sale of 5,000 secured NCDs of the face value of Rs 1 lakh each, comes at a coupon of 1.43 per cent.
It issued 3.65 crore warrants at Rs 14 per warrant, and the warrant holder has the right to exchange one warrant for one equity share of the company in the next three years at a pre-agreed price of Rs 1,475.

The conversion price of Rs 1,475 is a 25 per cent premium over the floor price as on September 30, determined by a formula announced by Sebi, he said.

Assuming all the warrant holders convert into equity, the dilution in the stock will not be over 2.2 per cent, he said.
Both the NCDs as well as the warrants were issued to qualified institutional buyers domestically, the company said, adding that the NCDs have been listed on both BSE and NSE.
Kotak Mahindra Capital Company, Axis Bank, Axis Capital, Citigroup Global Markets India, HDFC Bank, ICICI Bank, ICICI Securities, IDFC Securities, IndusInd Bank and JM Financial Institutional Securities acted as global coordinators and book running lead managers for the issue.

HDFC's scrip closed 0.17 per cent higher at Rs 1,258.10 apiece on the BSE, as against a 0.55 per cent gains in the benchmark.