HDFC Bank to raise Rs 4200 cr from equities

Mumbai, May 17 (UNI) HDFC Bank Director Board, which met here today, decided to raise an additional share capital of Rs 4200 crore to support its capital restructuring plans.

The Bank will pump in the fund to meet the new Basel 2 capital adequacy ratio (CAR) requirements directed by the Reserve Bank of India (RBI) in its annual monetary policy. This apart, the proceeds will also used to support its growth plans.

The equity issue will result in the reduction of present shareholding of HDFC group in the Bank which is presently at 21.56 per cent.

The Director Board also proposed to offer 135,82,000 equity shares of Rs 10 each at an issue price of Rs 1023.49 per share by way of preferential offer in order to maintain the shareholding of the promoter group at 23 per cent of the enhanced capital base.

The balance amount of the proposed equity capital will be raised either as domestic public offering or as public/private offering in one or more international markets, an official statement said.

''Given the market opportunity opened up by the continued economic growth offers to the banking sector, it is important to adequately capitalize its growth plans,'' said an HDFC source.

Many of the private and public sector banks like ICICI and Central bank of India (CBI), had announced plans to raise capital from equities to stand in line with the changed capital adequacy ratio requirements in recent past.

While ICICI is expected to raise Rs 20,000 crore through public issue and American depository receipts(ADR), Central Bank IPO is expected to hit the market in June.

UNI