HDFC launches Rs 14,000 crore QIP at floor price of Rs 1,838; stock up 1.5%

The floor price is at a 3.5 per cent premium of Wednesday's close price. The company will use part of fresh capital for funding inorganic opportunities and investments in existing group businesses.

Shares of HDFC gained 1.5 per cent to quote at Rs 1,804.85 on the BSE on Thursday after the mortage lender announced launch of its Rs 14,000 crore-Qualified Institutional Placement (QIP). The equity shares opened for subscription on Wednesday with a floor price of Rs 1,838.94 per share, which is at a 3.5 per cent premium of Wednesday's close of Rs 1,776.9 per share.

HDFC might offer a five per cent discount on the floor price, it said in a regulatory filing. Besides, the mortgage lender is also looking to raise Rs 9,000 crore through secured non-convertible debentures. READ HERE

The company will use part of fresh capital for funding inorganic opportunities and investments in existing group businesses. It is also looking at setting up a real estate fund in collaboration with other investors to finance stressed projects.

HDFC’s capital adequacy ratio (CAR) was 17.6 per cent, of which tier-I capital was 16.5 per cent and tier-II capital was 1.1 per cent, in financial year 2019-20 (FY20). The investment in HDFC Bank has been considered as a deduction in the computation of tier-I capital.

During the June quarter of FY21, HDFC reported a pre-tax profit of Rs 3,607 crore, as against Rs 3,985 crore in Q1FY20 on additional provisioning for pandemic-related uncertainties and a negative carry due to higher liquidity.

At 9:52 am, the stock was quoting at Rs 1,787 per share, up 0.6 per cent on the BSE. In comparison, the S&P BSE Sensex was ruling 200 points, or 0.53 per cent, higher at 37,864. So far in the financial year 2020-21, the stock of HDFC has underperformed the market rally bu surging 9 per cent till Wednesday, as against 28 per cent rally in the Sensex.