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    HDFC Bank: HDFC Bank may take infra bond route to raise around Rs 15,000 crore


    Mumbai: HDFC Bank is making market enquiries about the issuance of infrastructure bonds worth around ₹10,000-15,000 crore as India’s largest lender by market value looks to garner long-term capital and meet the reserve requirements arising out of its last-year merger with erstwhile parent HDFC.

    “Bond markets are relatively stable now after the election-related volatility and for HDFC Bank, infrastructure bonds are a desirable option because these instruments bring leeway on maintenance of statutory liquidity ratio (SLR) and cash reserve ratio (CRR),” said a source aware of the developments.

    An email sent to HDFC Bank requesting a comment on the matter did not receive a response by the time of publication. In April, HDFC Bank had said that it plans to raise up to ₹60,000 crore through the issuance of various types of bonds in the current financial year. Funds raised through infrastructure bonds, which have a minimum maturity of 7 years, are exempted from the maintenance of SLR and CRR, which are mandatory reserve requirements for banks.

    HDFC Bank May Take Infra Bond Route to Raise around ₹15k croreAgencies

    SLR, which is the portion of deposits that banks must invest in liquid securities like government bonds, is currently at 18%. The CRR, which is kept with the RBI is at 4.5% of net demand and time liabilities, a proxy for deposits.

    For HDFC Bank, the push towards infrastructure bonds comes at a time when the lender is trying to deftly balance the growing portion of deposits it must set aside as reserves after the merger with the relatively lower-yielding home loans that it inherited on its balance sheet from HDFC.The country’s largest bank by market capitalisation has witnessed a compression in its net interest margins over the last couple of quarters due to the new asset-liability mix. HDFC Bank’s net interest margin was at 3.44% in FY24 versus 4% in FY23.Further, with the bank not receiving any dispensations from the RBI on maintenance of reserves after the merger, issuance of infrastructure bonds as a means of garnering capital assumes more importance. In March, ET reported that the RBI had declined a request from HDFC Bank to permit classification of more than ₹1 lakh crore of securities issued by the erstwhile HDFC as infrastructure bonds. HDFC had more than ₹1.20 lakh crore of bonds classified as infrastructure finance instruments. If these bonds were given the infrastructure tag in the bank they can be set off against infrastructure and affordable housing loans of the merged entity without maintaining CRR and SLR on them.

    HDFC on its own had about ₹1 lakh crore of affordable housing loans and this would totally be offset against them.

    HDFC Bank had last issued infrastructure bonds in March 2024, raising ₹2,910 crore through such instruments at a rate of 7.65%.

    Latest RBI data showed that as on May 31, bank credit growth was at 16.1% year-on-year, excluding the impact of the HDFC merger. Deposit growth over the same period was at 12.2%.

    https://img.etimg.com/thumb/msid-111010765,width-1200,height-630,imgsize-28532,overlay-etmarkets/photo.jpg



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