Ahead of merger, HDFC Bank likely to raise Rs 2.7 lakh crore: Report

HDFC Bank is planning to raise nearly Rs 2.7 lakh crore to meet the requirements for its merger with parent company HDFC Ltd, according to a Mint report.

HDFC Bank is planning to raise Rs 2.2 lakh crore from public deposits and corporate bonds and an additional Rs 50,000 will also be raised from deposits which will go towards meeting SLR and capital requirements.

HDFC Ltd, a non-banking entity that had borrowed from other lenders, will have to repay its debt for the merger to materialise since Indian banks cannot show loans from other banks on their balancesheet.

While HDFC has asked RBI to waive off the SLR requirement for now and comply with it in a phased manner, the central bank is yet to respond, the publication reported citing people in the know of the matter.

Banks need to maintain 18 per cent SLR and 25 per cent SLR as of the last Friday of the second fortnight of a month, according to the Banking Regulation Act, 1949.

DH could not independently verify the report.

HDFC Bank and HDFC in April announced the $40 billion merger, touted as the largest such transaction in corporate history.

As of April 1, 2022, the market capitalisation of HDFC Bank was Rs 8.36 lakh crore ($110 billion) and that of HDFC Rs 4.46 lakh crore ($59 billion).

Post-merger HDFC Bank will be twice the size of ICICI Bank, which is the third-largest lender now.