HDFC Bank to raise ₹50,000 cr via bonds in FY24; stock rises

Shares of HDFC Bank rose nearly 1% on Wednesday, a day after the country’s largest private sector lender by assets unveiled a plan to raise fund via debt securities during the financial year 2023-24. The bank proposes to raise up to ₹50,000 crore over the period of the next twelve months through private placement mode, subject to board approval. The capital will be raised by issuing perpetual debt instruments (part of additional Tier I capital), Tier II capital bonds, and long-term bonds (financing of infrastructure and affordable housing).

“The bank proposes to raise funds by issuing Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long-Term Bonds (Financing of Infrastructure and Affordable Housing) up to total amount of ₹50,000 crores over the period of next twelve months through private placement mode,” HDFC Bank said in a BSE filing on Tuesday.

As per the release, the board of directors will consider this proposal at its meeting on April 15, 2023. The board will also consider and approve financial results for the quarter and year ending March 31, 2023.

HDFC Bank shares opened higher for the second straight session at ₹1,665.60 against the previous closing price of ₹1,663.70 on the BSE. In the first hour of trade so far, the banking heavyweight rose 0.9% to hit a high of ₹1,678.95, while the market capitalisation rose to ₹9.35 lakh crore.

HDFC Bank shares currently trade 1.5% lower than their 52-week high and 32% higher than their 52-week low. The stock touched a 52-week high of ₹1,702 on January 24, 2022, and a 52-week low of ₹1,271.75 on June 17, 2022.

Earlier in February this year, the private sector lender, acting through GIFT City IFSC banking unit, raised $750 million through a dollar bond sale. The USD denominated senior unsecured instruments, rated Baa3 by Moody's Rating Services and BBB- by S&P, will have a three year maturity, with settlement on 2 March 2023, and the maturity on 2 March 2026.

Last week, HDFC Bank released its business update for the fourth quarter ended March 2023, with its advances and deposits registering double-digit growth, aided by a rise in retail, and commercial and corporate loan books. It posted a 16.9% year-on-year (YoY) rise in advances at ₹16,00,500 crore as of March 31, 2023, as compared to ₹13,68,800 crore in the same period last year. On the sequential basis, advances increased 6.32% from ₹15,06,800 crore in the December quarter of FY23.

As per the bank, domestic retail loans grew around 21% over March 31, 2022, and around 5% over December 31, 2022. The commercial and rural banking loans grew by nearly 30% YoY and around 9.5% sequentially; and corporate & other wholesale loans climbed by around 12.5% YoY and by around 4.5% on quarter-on-quarter (QoQ) basis.

During the quarter under review, the bank’s deposits aggregated to around ₹18,83,500 crore, a growth of around 20.8% over ₹15,59,200 crore in the corresponding period last year. Sequentially, it increased by 8.7% from ₹17,33,200 crore as of December 31, 2022. Segment-wise, retail deposits increased by around ₹1,06,700 crore during the quarter, and grew around 23.5% YoY and around 7.5% QoQ. The wholesale deposits also rose by 10% YoY and by 15.5% QoQ.

The bank’s CASA deposits, the amount of money that gets deposited in the current and savings accounts of bank customers, stood at around ₹8,36,000 crore in Q4 FY23, a growth of around 11.3% over ₹7,51,000 crore in Q4 FY22, and a growth of around 9.6% over ₹7,63,000 crore in Q3 FY23.