To boost Tier 1,Tier 2 capital and long term fund base
MUMBAI: HDFC Bank board has given approval to raise up to Rs50,000 crore in the next 12 months through perpetual debt instruments (to add Tier 1 capital), Tier 2 bonds and long term bonds in order to finance infrastructure projects and housing, according to a market filing by the bank.
The fund will be raised through private placement mode subject to the approval of the shareholders and the regulatory approvals. The bank already sits on a comfortable capital with the total Capital Adequacy Ratio (CAR) as per Basel III guidelines being at 14.8 per cent as on March 31, 2018 (14.6 per cent as on March 31, 2017) as against a regulatory requirement of 10.875 per cent including Capital Conservation Buffer of 1.875 per cent.
During the year ended March 31, 2018, the bank had raised additional Tier 1 capital bond of Rs8000 crore and Tier 2 capital bonds of Rs2000 crore.
The board of directors of the bank at their meeting held on December 20, 2017 had approved the raising of funds aggregating up to Rs24,000 crore of which the board had decided that an amount up to a maximum of Rs8500 crore would be through the issuance of equity shares of face value of Rs2 each pursuant to a preferential issue to HDFC Ltd (the bank’s promoters) and the balance to be raised through the issuance of equity shares/convertible securities/depository receipts pursuant to a Qualified Institutions Placement (QIP)/American Depository Receipts (ADR)/Global Depository Receipts (GDR) programme.
The said plan to raise funds was approved by the shareholders of the bank at its extraordinary general Meeting (EGM) held on January 1, 2018