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HDFC Bank said to mull relying on India in 155 billion rupees offer

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HDFC Bank Ltd, the world's most expensive major lender, is considering relying entirely on the Indian market for a share sale that could raise as much as 155 billion rupees (S$3.07 billion), people with knowledge of the matter said.

[MUMBAI] HDFC Bank Ltd, the world's most expensive major lender, is considering relying entirely on the Indian market for a share sale that could raise as much as 155 billion rupees (S$3.07 billion), people with knowledge of the matter said.

The Mumbai-based bank is weighing seeking all the capital through a qualified institutional placement in India, rather than its usual practice of splitting the fundraising between an offering of local stock and a sale of American depositary receipts, according to the people. HDFC Bank aims to start taking investor orders within the next couple of weeks, the people said, asking not to be identified because the information is private.

HDFC Bank is focusing on an offering in India because it hasn't finished preparing its latest financial statements under US accounting standards, which it would need for an ADR sale, according to the people.

The lender, helmed by Chief Executive Officer Aditya Puri, has consistently maintained a low bad-loan ratio by limiting its exposure to heavily indebted Indian companies and lending to the country's growing middle class. The planned share sale would rank as one of the biggest-ever Indian equity offerings in local-currency terms, data compiled by Bloomberg show.

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HDFC Bank said in December its board had approved a potential equity offering of as much as 240 billion rupees, with its parent company Housing Development Finance Corp planning to invest 85 billion rupees. It will use the money to boost its capital buffers and support its growth plans for several years, Deputy Managing Director Paresh Sukthankar said last week.

The lender is still waiting on some regulatory approvals before launching the share sale, the people said. The timeline could slip, and details of the offering may still change, according to the people. A representative for HDFC Bank said he couldn't immediately comment.

HDFC Bank has the biggest weighting in the benchmark S&P BSE Sensex. It trades in Mumbai at about 4.8 times book value, making it the most expensive among lenders across the globe with at least US$50 billion in market value, data compiled by Bloomberg show.

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