HDFC to raise over Rs 10,000 cr through issuance of securities

Mortgage lender HDFC will raise more than Rs 10,000 crore through issuance of warrants and non-convertible debentures to qualified institutional investors.
Housing Development Finance Corporation (HDFC) would mop up Rs 5,000 crore through issuance of non-convertible debentures besides over Rs 5,000 crore worth warrants.
Pursuant to the receipt of applications from eligible Qualified Institutional Buyers (QIBs), the committee of directors today decided to close the receipt of bids, HDFC said in a late evening regulatory filing.
It would allot 3.65 crore warrants at an issue price of Rs 14 apiece, at an exercise price of Rs 1,475 per share.
The warrant issue price of Rs 14 apiece would neither be adjusted against the exercise price nor would be refundable, the filing said.

Sources said the warrant exercise price of Rs 1,475 represents a premium of 22 per cent to the closing price of Rs 1,212.75 as on September 30, 2015 on the NSE and when the warrant issue price of Rs 14 is taken into consideration, then the exercise price would be at a premium of 23 per cent.

Besides, the exercise price represents a premium of 24 per cent over the Sebi formula price of Rs 1,189.66 per share. If the warrant issue price of Rs 14 is taken into account, the premium over the capital market regulator's formula would be 25 per cent, they added.

On NCDs, the filing said 5,000 debentures of face value of Rs one crore each due in March 2017, for cash at par aggregating to Rs 5,000 crore carry an annual coupon rate of 1.43 per cent.
For each NCD, 7300 warrants have been allocated.
"The maximum dilution that could take place in future, assuming that all the warrants are converted into equity shares of the Corporation at the warrant exercise price, would be up to 2.20 per cent of the expanded equity share capital of the Corporation," the filing said.
NCDs and warrants have been allocated only to domestic QIBs, it added.

The issuance of warrants and NCDs were managed by Kotak Mahindra Capital, Axis Bank, Axis Capital, Citigroup, HDFC Bank, ICICI Bank, ICICI Securities, IDFC Securities, IndusInd Bank and JM Financial.