HDFC Bank's NBFC arm, HDB Financial Services Limited, is planning to raise Rs. 8600 crore via debentures. There are speculations of the NBFC company coming up with an IPO offer, but the same has been stalled as the company is currently probably waiting for this disruptive time period to get over.
HDB Financial Services is among the leading NBFCs that caters to the needs of an Aspirational India both retail as well as business clients. The company incorporated in 2007 is accredited with CARE AAA & CRISIL AAA ratings for its long-term debt & Bank facilities and an A1+ rating for its short-term debt & commercial papers.
The company has severely felt the impact of the Covid 19 with net profit seeing a crash of a huge 50 percent from Rs 1,004 crore in 2019-20 to Rs 502 crore in 2020-21. The second wave has aggravated the situation mostly for the self-employed and informal space
As per sources which told a leading business daily, the board of the company met in April to discuss on the contours of the fund raising via NCDs worth Rs. 8600 crore. The proceeds from the offer shall be put to lending, to boost current capital levels as well as refinancing of company's existing borrowings.
The company's CAR ratio is also not meeting the regulatory requirement and is at 19 percent as against the needed 15 percent.
As interest rates in the economy may anytime head northwards, it makes sense to tap the debt market for raising funds at a lower costs.