Bangalore: HDFC (Housing Development Finance Corporation) has decided to dilute 3.5 percent equity to qualified institutional buyers (QIBs) to raise over Rs.4000 crore, reports Business Standard.
At its board meeting held on August 17, 2009, the company decided to offer a combination of non-convertible debentures as well as detachable warrants. The non convertible debentures (NCD) will consist of two and three year zero coupon bonds. The two year NCD has been fixed at 7.15 percent and the three year NCD at 7.5 percent. The face value of these NCD's will be at Rs.1 lakh.
At the time of conversion, the company will offer 1.09 crore shares of total warrants, which will lead to an equal dilution of 3.5 percent. The conversion price has been fixed at Rs.3,000, but at the time of investments, the investors will have to pay a premium of Rs.275, so the total cost for these warrants will be Rs.3,275.
Five major banks have been appointed as lead arrangers for this issue including Axis Bank, Kotak Mahindra Bank, HSBC, Citibank, JM Financial. All these five lead arrangers have committed to underwrite the entire Rs.4,000 crore, each committing around Rs.500-1,000 crore issuance and the raised money is likely to be invested in different companies of HDFC, which is about Rs.3,600 crore in HDFC Bank and Rs.400 crore in its insurance arm.
At its board meeting held on August 17, 2009, the company decided to offer a combination of non-convertible debentures as well as detachable warrants. The non convertible debentures (NCD) will consist of two and three year zero coupon bonds. The two year NCD has been fixed at 7.15 percent and the three year NCD at 7.5 percent. The face value of these NCD's will be at Rs.1 lakh.
At the time of conversion, the company will offer 1.09 crore shares of total warrants, which will lead to an equal dilution of 3.5 percent. The conversion price has been fixed at Rs.3,000, but at the time of investments, the investors will have to pay a premium of Rs.275, so the total cost for these warrants will be Rs.3,275.
Five major banks have been appointed as lead arrangers for this issue including Axis Bank, Kotak Mahindra Bank, HSBC, Citibank, JM Financial. All these five lead arrangers have committed to underwrite the entire Rs.4,000 crore, each committing around Rs.500-1,000 crore issuance and the raised money is likely to be invested in different companies of HDFC, which is about Rs.3,600 crore in HDFC Bank and Rs.400 crore in its insurance arm.
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