Domestic Bonds

HDFC raises Rs 10,000 crore through 7.18% debentures


The Housing Development Finance Corporation (HDFC) raised Rs 10,000 crore through 10-year bonds carrying a coupon of 7.18%. The money will be deployed for business operations. The issue size was Rs 500 crore with a green shoe option of Rs 9,500 crore.

Given the company’s high reputation, the price was correct at 7.18%, the bond brokers said, adding that the initial indication was 7.25-7.30% on yield.

HDFC regularly visits the market with debentures and has raised around Rs 50,000 crore in the domestic bond market this financial year, market sources said.






Meanwhile, another housing finance company – Canfin Homes – plans to enter the market to raise up to Rs 700 crore through 39-month bonds.

In January 2022, CRISIL reaffirmed the “AAA” rating of HDFC’s non-convertible debentures (NCD).

The ratings continue to reflect HDFC’s market leading position, strong track record, good asset quality, diversified and stable resource profile.

It also has a strong financial risk profile. These strengths are partially offset by exposure to fierce competition in the housing finance segment.

HDFC has a well-diversified and stable resource profile, which allows for flexibility in borrowing.

The borrowing mix mainly includes market borrowings (41% of total borrowings as of September 30, 2021) and term deposits (35%). Term loans (including external commercial or ECB borrowings) represented 24% of total borrowings as of September 30, 2021.

Strong resource mobilization capabilities, high fixed deposit rollovers and a substantial proportion of floating rate mortgages in the portfolio mitigate the inherent tenure mismatch and interest rate risk in the finance industry housing.


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