Commercial banks’ combined fund raise through bonds (AT I, tier II and infrastructure bonds) was about Rs 1.14 trillion in 2022-23 as against about Rs 73,200 crore in FY22.
HDFC Bank’s board of directors will consider this proposal at its meeting scheduled for April 15.
Its stock closed 0.34 per cent higher at Rs 1,663 per share.
The coupon rate for the bonds increased, reflecting that interest rates hardened and liquidity had tightened in FY23. This was an outcome of the Reserve Bank of India’s monetary policy stance — hiking rates and withdrawing accommodation.
Tier II bonds are cheaper than AT1 bonds in terms of the coupon rate. The coupon is around 100 basis points lower for Tier II bonds than AT1 instruments. Another aspect is demand for such instruments. Those with lower ratings find it difficult to place AT1 bonds, bond dealers say.
HDFC Bank has reported a 17 per cent year-on-year (YoY) increase in advances to Rs 16 trillion at the end of March 2023. Sequentially, advances were up 6.2 per cent over the December quarter. Its capital adequacy ratio stood at 17.66 per cent at the end of December 2022.
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