India-based private sector lender HDFC Bank is planning to raise as much as INR500bn ($6.57bn) through the issuance of various debt instruments, according to a regulatory filing.
The decision was cleared by HDFC Bank’s board of directors.
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To raise the funding, the bank will issue perpetual debt instruments (PDIs), which is part of the additional tier I (AT1) capital.
In addition, HDFC Bank is expected to issue tier II capital bonds and long term bonds.
The funding will take place through private placement mode over the period of the next 12 months, the bank said.
Yes Bank, another India-based private sector lender, is also reportedly planning to raise at least INR80bn ($1bn) through a public offering of shares.
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By GlobalDataThe Reserve Bank of India (RBI), India’s central bank, enables lenders to raise capital through the issuance of innovative perpetual debt instruments (IPDI) and debt capital.
According to the regulatory guidelines, lenders can issue these instruments in Indian currency only.
They would need the central bank’s nod to issue these instruments in foreign currency.
The fundraising is subject to shareholders’ approval at the annual general meeting (AGM) scheduled next month.
Notably, earlier this year, People’s Bank of China (PBOC), the central bank of China, raised its stake in HDFC Bank.
PBOC, according to the exchange data, increased its stake from 0.8% to 1.01%, comprising nearly 17.49 million shares of the Indian lender.
