Mortgage lender HDFC said it concluded the India’s largest-ever bond issuance of 25,000 crore, to be repaid to investors in a decade. LIC, EPFO and certain private banks which subscribed the bonds issue, ET NOW reported.
HDFC had received offers of over 27,000 crore for the 10-year bond issuance from 92 investors. The company accepted bids from 55 investors for a cumulative raise of 25,000 crore at a spread of just below half a percent to the Indian 10-year bond yield at close yesterday.
HDFC, which is in the process of merging with HDFC Bank, will pay a coupon rate of 7.97 percent for the 10-year issue. This compares with the benchmark bond yield of 7.34 percent on Thursday.
ET NOW spoke to Vice Chairman of HDFC Ltd Keki Mistry, who suggested that housing sector has continued to see strong demand which requires fund. He further said that the company is looking at various avenues with regard to raising fund.
“Demand in the housing sector continues to be strong throughout the country and across all categories; affordable to premium housing. The penetration level of housing in India is one of the lowest in the world. India’s mortgage to GDP ratio is about 11 percent compared to 20 percent+ in many other emerging markets and 60 percent+ in some of the advanced economies. On a sustainable long-term basis, the demand for housing is expected to remain strong, and investor support in long term financing aids allocation of resources towards on-lending to the sector,” V S Rangan – Executive Director at HDFC Ltd said.
