HDFC Bank Raises Capital through ADS

Looking overseas to raise capital, HDFC Bank Ltd. has generated USD 698 million by selling 6.59 million American Depository Shares on the New York Stock Exchange at USD 92.10 each.

This follows ICICI Bank’s raising of USD 2.14 billion last month.

The figure includes the over allotment option exercised by the underwriters, which was reserved at USD 91 million.

The response to the sale represents investor confidence in the Indian economy,
observed financial experts DSP Merrill Lynch.
Sources reveal that the sale of the shares created a demand for USD 2
billion, which included long-term investments from several funds.

HDFC Bank,
with a market value of USD 10 billion will utilise the infusion of capital
to extend loans to the growing economy.

Every American Depository Share is equivalent to 3 equity shares of HDFC,
and Rs.1235.06. The advisory team for HDFC included Merrill Lynch, Morgan
Stanley, Nomura and Credit Suisse.
Meanwhile, HDFC Bank’s rival ICICI, sold 2.87% of its stake to Dubai International Capital early last week.

This makes DIC one of the leading shareholders in the bank, and it is estimated
that USD 717 million would have been paid for the buy-out. The Singapore
Government’s investor arm Temasek owns 9.7% of ICICI’s stake which is likely to go up soon.

Photo: Bangladesh Investment Handbook Inauguration 2020-08-06 (PID-0033065) by Press Information Department, licensed under Public domain, via Wikimedia Commons.