HDFC Bank said on Saturday that it will raise up to Rs 50,000 crore through bonds keeping in mind the infrastructure financing needs and affordable housing loans. The board of directors of the bank has permitted issuance of perpetual debt instruments (bonds with no maturity period), capital bonds and long term bonds up to Rs 50,000 crore.
In the information given to the regulator, the bank said that it will be raised through private placement mode in the next 12 months. However, permission of the other shareholder is yet to be obtained for this. Actually, by issuing bonds, usually those companies raise money which do not need that much money. Often only healthy companies raise money through bonds so that they can use it for business growth and other projects. Raising money by issuing bonds is a better option for companies than taking a loan from a bank as the interest is comparatively less.
What’s in it for investors
For investors, this can be a good opportunity for a continuous income throughout life. As mentioned above, the bank will also issue perpetual bonds in which investors can invest their money. Since perpetual bonds have no maturity period, the bank will pay interest for life to the investor. Along with this, there are also long term bonds which can have maturity of 10-30 years and investors can earn profits from it for a long time. HDFC Bank is the largest private bank in India. The performance of the bank in the March quarter figures has been better. The profit of the bank has increased by 23 per cent year-on-year to Rs 10,055 crore. Apart from this, after the merger of HDFC Limited with the bank, the business of the bank is expected to increase further. In such a situation, investing in HDFC Bank bonds can be a good decision.
Renu Karnad Non-Executive Director
HDFC, apart from releasing quarterly figures and providing information on bonds, also informed the regulator that Renu Karnad has been added as a non-executive director on the bank’s board with effect from September 3, 2022. However, his appointment is currently subject to the permission of the shareholders at the AGM. Renu Karnad was the Managing Director (MD) of HDFC Corporation Limited since 2010.