HDFC Bank raises $1.75 billion in largest Indian bank bond issue since financial crisis

HDFC Bank’s overseas bond offering, split between three and five-year maturities, attracts over $7 billion in orders from global investors, marking the largest fundraise by an Indian bank since the 2008 financial crisis amid rising investor confidence and increased foreign investment.

HDFC Bank has tapped overseas investors for $1.75 billion in a bond sale that underscores both the scale of demand for Indian bank debt and the lender’s push to broaden its funding base. The bank said the issue, arranged through its GIFT City branch, was made up of senior unsecured notes and drew interest from buyers across Asia, the US and Europe.

According to the bank’s filing, the offering was split into $500 million of three-year paper priced at a coupon of 5.16% and $1.25 billion of five-year notes carrying 5.4%. Business Standard reported that the bonds will be listed on India INX and NSE International Exchange, adding another route for offshore investors to trade the securities.

The size of the deal makes it the largest fundraising by an Indian bank since the global financial crisis, according to reports in Business Standard and The Economic Times. The Economic Times said the order book topped $7 billion, a sign of strong appetite even as global borrowing costs remain elevated. Livemint linked the move to lenders racing to raise foreign currency funds ahead of the Reserve Bank of India’s early closure of the FCNR(B) deposit window.

The latest sale also takes HDFC Bank’s dollar bond fundraising to $2.5 billion since June, Business Standard reported. Analysts cited in the coverage said the tight pricing and broad distribution reflect investor confidence in the lender, while the fundraising came a day after the Reserve Bank of India cleared Life Insurance Corporation of India to raise its stake in HDFC Bank to as much as 9.99%, subject to the latest disclosed holding levels.