HDFC is raising Rs 10,000 crore through the issue of non-convertible debentures (NCDs) on a private placement basis.

While the unsecured NCDs will have a tenure of 10 years, a regulatory filing showed the coupon rate at 7.75 per cent which will be paid annually.

The country’s largest housing finance company, which will be merged with HDFC Bank, said the proceeds would be utilised to finance or refinance the housing finance business of the corporation.

The HDFC board in March had approved a proposal to issue non-convertible debentures (NCDs) in tranches, aggregating Rs 57,000 crore.

Earlier, the corporation had obtained the permission of its shareholders on the fund-raising at its annual general meeting (AGM) in June 2022.

The board also approved an increase in the overall borrowing powers of the company to Rs 6.50 lakh crore from Rs 6 lakh crore, outstanding at any point in time.

Shares of HDFC on Monday settled 0.43 per cent lower at Rs 2,640.45 on the Bombay Stock Exchange.

As part of the Rs 57,000-crore fund raising, HDFC had mobilised Rs 8,000 crore in May by issuing bonds on a private placement basis.

In April last year, HDFC Bank had agreed to take over HDFC in a deal valued at about $40 billion, creating a financial services powerhouse. The proposed entity will have a combined asset base of around Rs 18 lakh crore.

Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank.

Every HDFC shareholder will get 42 shares of HDFC Bank for every 25 shares they hold.

The merger is expected to be completed by July. HDFC had reported a 20 per cent increase in its profit after tax for the January-March quarter at Rs 4,425 crore.