HDFC Life: HDFC Life to raise Rs 1,500 crore through NCDs

Mumbai: HDFC Life Insurance will raise ₹1,500 crore through non-convertible debentures (NCDs) after its board approved the plan on Friday. The insurer will issue ₹1,000 crore in NCDs, with an option to raise an additional ₹500 crore via a greenshoe option, all on a private placement basis. The NCDs, carrying a coupon rate of 8.05% and a 10-year term, are set for allotment on October 9.

Company’s capital raising committee (CRC) met on Friday to finalise commercial terms for the fundraising under this first tranche, the company said in a stock exchange announcement. In a previous board meeting in July, the insurer had authorised raising ₹2,000 crore through NCDs in one or more tranches.

The move comes as HDFC Life’s solvency ratio fell from 200% in Q1 FY24 to 186% in Q1 FY25, though still comfortably above the regulatory threshold of 150%. The life insurer, like others in the sector, has faced margin pressures with its new business margin dropping to 25% from 26.2%. Operating return on embedded value also declined to 15.5% from 16%, while total expenses as a percentage of premiums rose to 21.4% from 19.8%.