HDFC Bank plans to raise $1 billion for overseas expansion

Mumbai: HDFC Bank Ltd, the country's third-largest bank by market capitalisation, plans to raise up to $1 billion (Rs4,000 crore) through a medium-term note (MTN) issue, to finance its expansion overseas.

HDFC aims to open its first branch abroad, in Bahrain, within a few months. The bank also plans to open new offices in London and Hong Kong.

The bank would seek approval for the MTN programme, which would involve sale of bonds with maturities of five years or more to international investors.

HDFC Bank would, however, wait until global markets steady, said Sudhir Joshi, the bank's treasurer.

Standard & Poor's has rated the plan's lower-tier 2 bonds, which have a minimum maturity of five years, at "BBB-", and upper-tier 2 bonds, which have a minimum maturity of 15 years, at "BB+".

HDFC Bank had 754 branches in 327 Indian cities as of end-2007. The bank also saw its balance sheet grew 47 per cent in 2007 to Rs89.6 crore and its capital adequacy ratio stood at 13.8 per cent, well above a required 9 per cent.

HDFC Bank joins rivals such as ICICI Bank and Bank of Baroda in expanding overseas, tracking local companies making overseas acquisitions.