For various key objectives
The Board of Housing Development Finance Corporation has accorded its approval for raising of funds up to an aggregate amount of Rs 13000 crore. The Corporation will consider raising of funds by issue of equity shares or compulsorily convertible debentures or warrants or a combination thereof.The key objectives of raising capital are -
- Participate in the preferential issue of HDFC Bank
The Corporation together with its subsidiaries currently holds 21.01% stake in HDFC Bank. HDFC Bank proposes to raise further capital to fund its growth. In order for the Corporation to more or less maintain its current shareholding in HDFC Bank, it will need to participate in HDFC Bank's preferential offer up to an amount not exceeding Rs 8500 crore. It may be noted that the Corporation did not participate in the last equity issue of HDFC Bank in February 2015.
- Capital needs for new initiatives
The corporation is exploring opportunities in the health insurance sector in conjunction with its subsidiary, HDFC ERGO General Insurance Company.
The Corporation is evaluating opportunities in the acquisition and resolution of stressed assets in the real estate sector.
The Corporation has set up funds for investing in the equity and mezzanine debt of affordable housing projects. The Corporation has committed sponsor support to these funds.
- Growth of subsidiaries
The Corporation may in the future, require capital in some of its subsidiary companies namely, HDFC ERGO General Insurance Company, HDFC Education and Development Services and HDFC Credila Financial Services amongst others.
- Capitalise on new opportunities
While the Corporation has adequate resources to fund its current mortgage operations, there could arise opportunities for organic and inorganic growth in the affordable housing space which may require additional capital.
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