A day after getting the government's approval to raise up to Rs 24,000 crore capital, private sector lender HDFC Bank today said it will use the funds to grow in semi-urban and rural pockets. This decision has come against the backdrop of an expected pick-up in credit growth driven by consumption-led demand and a recovery in the investment cycle, said the bank statement.
 
“We are delighted to hear that the government has approved our capital raising proposal. The additional capital will go a long way in supporting our growth plans over the next few years, especially in semi-urban and rural India,” said Paresh Sukthankar, Deputy Managing Director, HDFC Bank Ltd, adding “We do believe this decision bodes well for the overall investment climate and foreign inflows as well.” 
 
In a video message, Sukthankar said, "The additional capital will go a long way in supporting our growth plans over the next few years, especially in semi-urban and rural India." Welcoming the nod, he said the decision bodes will for the overall investment climate as well as foreign inflows into the country.
 
In the statement, the bank said it had to get the go ahead from the Cabinet Committee on Economic Affairs (CCEA) as this was an FDI (foreign direct investment) proposal in excess of Rs 5,000 crore not under the automatic route. The bank has been given the nod provided the overall foreign ownership does not breach the 74 per cent mark.
 
The Rs 24,000-crore capital infusion plan includes raising Rs 8,500 crore from parent HDFC such that the mortgage major's holding in the bank is retained at 25.60 per cent, while the rest is likely through a qualified institutional placement (QIP) of shares.
 
Media reports say at Rs 15,500-crore, this will be the highest ever QIP, exceeding the Rs 15,000 crore done by largest lender SBI last year. 
 
Meanwhile, the bank scrip closed 0.09 per cent up at Rs 2,037.15 a piece on the BSE as against a 0.39 per cent correction in the benchmark.
 
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As of March 31, 2018 the bank had a network of 4,787 branches and 12,635 ATMs and had 4.3 crore customers across 2,691 Indian towns and cities. The Bank’s balance sheet for the year stood at Rs 10.63 lakh crore.