HDFC shares fall 3% as it announces bond issue of up to Rs 4,000 crore

HDFC said that it will raise up to Rs 4,000 crore by issuing bonds on private placement basis. The issue size of the secured redeemable non-convertible debentures, to open on June 15

June 12, 2020 / 11:37 AM IST
 
 
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HDFC share price was down 3 percent intraday on June 12 and the stock was also one of the top losers in Sensex.

The stock price has seen a steady fall in the last 7 days and was quoting at Rs 1,734.80, down Rs 52.30, or 2.93 percent at 09:43 hours. It has touched an intraday high of Rs 1,742 and an intraday low of Rs 1,711.

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HDFC said that it will raise up to Rs 4,000 crore by issuing bonds on private placement basis. The issue size of the secured redeemable non-convertible debentures will open on June 15, 2020. The issue is of Rs 2,100 crore with option to retain over-subscription up to Rs 1,900 crore, the company said in a regulatory filing.

The issue, set to close on the same date (June 15), will offer coupon rate of 7.25 per cent per annum payable annually. The date of redemption is June 17, 2030.

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"The object of the issue is to augment the long-term resources of the Corporation. The proceeds of the present issue would be utilized for financing/refinancing the housing finance business requirement of the Corporation," Housing Development Finance Corporation Limited said.

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The company reported a standalone profit of Rs 2,232.5 crore for the quarter ended March 2020, declining 22 percent due to higher provisions related to COVID-19 and high base last year. But it was supported by lower tax cost (down 44.5 percent YoY).

Provisions (expected credit loss) increased significantly to Rs 1,274 crore for the quarter ended March 2020 which included the impact of COVID-19, against Rs 398 crore in March quarter 2019 and Rs 2,995 crore in December quarter.

Brokerage firm Geojit Securities has a buy recommendation on the stock with target of Rs 2,166 per share. The mortgage market in India is still at its infant stage, with the penetration of 10 percent in nominal GDP, implying huge growth potential over the long term aided by fiscal incentives and interest subvention scheme, said the brokerage firm.

According to Moneycontrol SWOT Analysis powered by Trendlyne, HDFC has high debt with declining revenue every quarter for the past two quarters.

Moneycontrol technical rating is neutral with technical indicators being bullish and moving averages being bearish.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​
Sandip Das
first published: Jun 12, 2020 11:37 am

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