MUMBAI (Reuters) - HDFC Bank Ltd HDBK.NS, India’s largest lender by market value, launched a share offer in the United States and India on Wednesday to raise up to $1.6 billion.
Indian lenders are seeking to raise new equity capital to meet global banking rules and also build a buffer for an expected acceleration in credit growth.
HDFC Bank, which is also listed in New York, filed with the US regulator to sell 22 million American Depositary Shares. HDFC Bank’s New York shares HDB.N were trading at about $57.3 per share, and at that price the bank is set to raise as much as $1.3 billion.
Separately, HDFC Bank is looking to raise up to 20 billion rupees ($324 million) in India by selling shares to domestic investors, according to a term sheet seen by Reuters on Wednesday. The bank is selling shares in the indicative price band of 1,057 rupees to 1,067 rupees apiece, the document showed.
The lender last week received the Indian government’s approval to raise up to 100 billion rupees ($1.6 billion) by selling shares on condition that its foreign ownership should not exceed 74 percent.
Indian banks are estimated to require more than $100 billion of new capital by March 2019 to meet with the Basel III global banking industry rules. State-run lenders in India, which dominate the market, are typically less well capitalized compared with their private sector peers.
HDFC Bank has said it does not have any immediate capital requirement. However, the new funds will help support its growth and especially when the industry credit growth picks up from current multi-year lows.
HDFC Bank’s share offer follows a $3.6 billion stock sale last week by state-run Coal India Ltd COAL.NS, in what was the largest ever equity offering in the Indian market.
State Bank of India SBI.NS, India’s top lender by assets, is planning to raise up to 150 billion rupees ($2.4 billion) in new equity capital.
($1= 61.7282 Indian rupees)
Reporting by Devidutta Tripathy, Himank Sharma, Abhishek Vishnoi; Editing by Sumeet Chatterjee and Greg Mahlich