Housing Development and Finance Corporation (HDFC) has raised R3,000 crore through its maiden offshore rupee-denominated bond issue at a semi-annual coupon rate of 7.875%, the company said in a statement on Thursday.
The annualised yield for the bonds works out to 8.33%, it added. The instruments will be listed on the London Stock Exchange.The bonds have been issued at a price of 99.24% of the par value and will be redeemed at par, the housing finance major said.The issue received a strong response, with the final order book standing at R8,673 crore from 48 accounts, representing an over-subscription of more than four times.The issue was announced by HDFC on July 11 with an initial size of R2,000 crore with a green shoe option of R1,000 crore. The proceeds will be used for the housing finance business of the company and for general corporate purposes.
Around 86% of the issue was taken by Asian investors, while the remaining was bought by European investors. Approximately 82% of the allocations went to institutional investors while the rest went to private banks.
“This is a milestone transaction for HDFC. We have successfully achieved our objective of attracting a global pool of capital to further diversify our borrowing profile,” Deepak Parekh, chairman at HDFC. said in the statement.
With this issue, HDFC became the first Indian company to issue rupee-denominated bonds, also called ‘masala bonds’, overseas. Masala bonds allow issuers to raise funds from overseas markets without taking on the risk associated with foreign-currency denominated bonds.
Speaking about the issue, Nikhil Rathi, chief executive officer at London Stock Exchange, said, “The success of this issuance shows the support of the global markets for high quality Indian companies.
Taking advantage of the efficient listing process and tapping the global markets in London, home to the deepest international investor base, Indian companies can now access international rupee-based financing without having to be concerned about foreign exchange risks.”
Credit Suisse, Nomura and Axis Bank were the book-running lead managers for the issue.