HDFC raises ₹25000cr in India’s largest ever private bond issue

According to HDFC, the coupon rate of 7.97 per cent (annualised) translates to a spread of 49 bps over Wednesday’s closing of 10-year government security yield. “The issue received a phenomenal response across all investor categories. HDFC launched the issue on the electronic book platform on Tuesday to raise ₹5,000 crore with an option to retain subscription for additional ₹20,000 crore,” it said.

As soon as the bids opened, there was wide participation from several investors, including insurance companies, pension funds, provident funds, banks and mutual funds, HDFC said. “The issue was oversubscribed and received 92 bids amounting to ₹27,863 crore of which the company retained 55 investor bids totalling ₹25,000 crore. The benchmark transaction in times of tougher systemic liquidity is indicative of the extent of investor interest and confidence in the group,” HDFC said.

“Demand in the housing sector continues to be strong throughout the country and across all categories affordable to premium housing. The penetration level of housing in India is one of the lowest in the world. India’s mortgage to GDP ratio is about 11% compared to 20 per cent plus in many other emerging markets and 60 per cent plus in some of the advanced economies,” said V S Rangan, Executive Director, HDFC.