HDFC takes QIP route to raise Rs4,300 crore

Housing Development and Finance Corporation, India's largest private home loan provider, opened a Rs4,300 crore fund-raising exercise through qualified institutional placementsyesterday evening, which could lead to equity dilution of up to 3.5 per cent.

Under the offering, HDFC is issuing non-convertible debentures of two types, one maturing in August 2011 and the other in August 2012, aggregating nearly Rs4,000 crore. Each NCD is priced at Rs10 lakh and comes with a warrant for Rs275 each. The company is issuing 1.1 crore warrants, each convertible into one equity share of the company within three years, at a price of Rs3,000, market sources said.

HDFC informed the Bombay Stock Exchange that the committee of directors of the company has decided to make an issue of the following securities to qualified institutional buyers on a QIP basis:

Issue of 109,53,706 warrants with a right to exchange the warrant for one equity share of face value of Rs10, any time before the expiry of three years from the date of its allotment; issue of 20,000 zero per cent secured redeemable non-convertible debentures of the face value of Rs10,00,000 each due August 2011 for cash aggregating to Rs2,000 crore; and issue of 20,000 zero per cent secured redeemable non-convertible debentures of the face value of Rs10,00,000 each due August 2012 for cash aggregating to Rs2,000 crore.

The maximum equity dilution that could take place if all the warrants are exchanged for equity shares would be up to 3.5 per cent of the expanded equity share capital of the company.

Citigroup, Goldman Sachs, Axis Bank, HSBS, JM Financial, Kotak Mahindra Capital Co and Nomura are the arrangers, the offer document showed.