The issue received 92 bids worth 278.63 billion rupees, of which the company retained 55 bids worth 250 billion rupees, HDFC said in an exchange notice. The proceeds would be utilised for financing/refinancing the corporation's housing finance business requirements, HDFC added. "Long-term investors have sufficient corpus and are also seeing inflows in the last quarter of the year, which must have been deployed in HDFC's bond issue," said Ajay Manglunia, managing director and head of investment grade group at JM Financial.
On Wednesday, Reuters reported that long-term investors will likely absorb the sale despite the large quantum, and that too without leading to a spike in yields.
HDFC had raised less than 20 billion rupees through 10-year bonds at a 7.79% coupon in November. Talking about the speculation that this was the last issue from the non-banking finance company (NBFC), HDFC's Rangan said, "the corporation's lending businesses, and hence the borrowing programmes, are expected to continue as always until the merger is effective. The proceeds are part of the corporation's regular borrowing programme meant to finance its lending operations." Most of the funds would help HDFC meet capital requirements after the merger, while some of it may also be used to buy government bonds to meet its statutory liquidity ratio needs post the merger, merchant bankers said. The NBFC has now raised an aggregate of 784.14 billion rupees through bond issuance in this financial year, the highest by any company.
Axis Bank, ICICI Bank, HDFC Bank and ICICI Securities Primary Dealership are the arrangers.
"Private banks that are also arrangers for the issue have
mostly tied up with other investors and will sell the stock to
them," a merchant banker who was involved in arranging the issue
said, requesting anonymity as they are not authorised to speak
to media.
($1 = 82.6270 Indian rupees)
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(Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)
