The country?s largest private sector housing finance firm, HDFC Ltd, has no plans to dilute its stake in its subsidiary HDFC Bank in the wake of the sector regulator National Housing Bank (NHB) putting an equity exposure ceiling of 20% in a company. However, HDFC spokesperson could not be contacted for comment on the NHB guideline.
As per the guideline, the aggregate exposure of a housing finance company to the capital market in all forms (both fund and non-fund based) should not exceed 40%of its net worth as on March 31 of the previous year.
Within this overall ceiling, direct investment in shares, convertible bonds/debentures, units of equity-oriented mutual funds and all exposures to Venture Capital Funds (VCFs) (both registered and unregistered) of the housing finance company should not exceed 20% of its net worth, the guideline issued said.
Networth of HDFC Ltd stood at Rs 13,137 crore at the end of March 2009.
Meanwhile the Corporation has raised Rs 4,300 crore through issue of warrants simultaneously with issue of non convertible debenture on QIP basis.
The maximum dilution that could take place in future, if all the warrants are exchanged for equity shares of the corporation at the warrant exercise price, would be up to 3.5% of the expanded equity share capital of the Corporation.
The composite cost of funds to the Corporation as a result of the simultaneous issue of warrants and NCDs will be 4.25% per annum.
The NCDs and warrants will be issued only to domestic QIBs. The warrants and the NCDs will be listed on the Bombay Stock Exchange and National Stock Exchange.