Shares of HDFC jumped over 7% to hit an all-time high with its market cap crossing Rs 3 lakh crore on Monday. With a huge appreciation in market cap, HDFC became the fifth-largest company on Indian bourses today surpassing Maruti Suzuki and HUL.
Shares of HDFC zoomed 7% on Monday after the board of India’s largest housing financier approved fundraising of up to Rs 13,000 crore primarily to maintain its holding in HDFC Bank and to enter segments like stressed assets and health insurance. Following the development, the shares of HDFC jumped as much as 7.15% to an all-time high of Rs 1,886.8 before settling up 5.8% at Rs 1,863 on NSE while the stock surged 7.08% to Rs 1,886 before finishing up 5.78% at Rs 1,863 on BSE, provisionally. A massive trading volumes had been observed in the shares of HDFC, as at 3:30 pm, nearly 1.2 crore shares exchanged hands on both NSE and BSE with about 95 lakh shares on NSE alone. With a sharp rise in the share prices of HDFC, the market capitalisation of mortgage lender zoomed past Rs 3 lakh crore.
Posting a huge appreciation in the market capitalisation of HDFC, the housing financier entered the top 5 club of companies by market capitalisation. HDFC on Monday added about Rs 19,929.96 crore to Rs 3,01,305.76 crore at the all-time high price of Rs 1,883.75 from Rs 2,81,375.8 on BSE. HDFC Ltd on Monday surpassed Maruti Suzuki India and Hindustan Unilever to become the fifth-largest company by market capitalisation in Indian bourses. Now HDFC is behind the market cap lead Reliance Industries, India’s largest IT company TCS, India’s most valuable lender HDFC Bank and the domestic FMCG giant ITC. At the closing price of Rs 1,863, the HDFC ended holding a market capitalisation of Rs 2,97,631.3 crore.
HDFC’s board approved the issuance of 6.43 crore shares of face value of Rs 2 each on a preferential basis at a price of Rs 1726.05 per share, aggregating to Rs 11,103.66 crore to various investors including Azim Premji Trust. A total of 3.01 crore shares will be issued to an affiliate of GIC Waverly Pte, 1 crore shares to the administrator of the pension plan for Ontario’s municipal employees (OMERS) of Canada and about 92 lakh shares to KKR firm Silverview Investment Pte, HDFC said in an exchange filing.
The board also approved the issuance of a such number of shares of face value of Rs 2 each through QIP (qualified institutional placement) such that the total amount to be raised shall not exceed Rs 1,896 crore, subject to approval. “The Committee of Directors of the Corporation at its meeting held today approved the issue of equity shares up to an aggregate amount not exceeding Rs 13,000 crore through a combination of a Preferential Allotment and Qualified Institutions Placement, subject to shareholders’ approval through postal ballot,” HDFC said in a statement.
“The key objective of raising capital is to participate in the preferential issue of HDFC Bank up to an amount not exceeding Rs 8,500 crore. This would enable the Corporation to maintain its current shareholding in HDFC Bank,” HDFC said further. “The Corporation will also need capital to sponsor funds it has set up to invest in the equity and mezzanine debt of affordable housing projects, support capital requirements of its subsidiary companies as and when required and capitalise on organic and inorganic growth opportunities in the affordable housing finance space,” HDFC added.