HDFC to raise Rs 4000 crore

HDFC The country's second largest private sector lender, the Housing Development Finance Corporation (HDFC) has reported a 21 per cent increase in its net profit for the first quarter of financial year 2009, indicating revival of demand across the housing segment.

India's top mortgage lender has announced its decision to raise funds worth Rs 4,000 crore, by placing debentures with institutions. It has already received approval for its shareholders for the qualified institutional placement (QIP) of non-convertible debentures with warrants, at its annual general meet.

HDFC chairman Deepak Parekh, set to become non-executive chairman of bank, said that the price will be fixed according to current market level. He said that the bank will not issue any bonus until 2012-13, owing to the present market conditions. Mr. Parekh, however, assured preferential allotment of shares in HDFC Standard Life to HDFC shareholders.

Expecting a rise in interest rates, Mr. Parekh said: "With the increased government borrowing, going forward everyone expects interest rates to rise. But for the present there is ample liquidity and interest rates are soft."

HDFC's net profit stood at Rs 564.92 crore for first quarter, as compared to Rs 468 in the same quarter of last financial year. However, it reported a 2.19% decline in net interest margins during the quarter.

Shares of HDFC declined 4.43 per cent and closed at Rs 2,410.3 on the BSE, on Wednesday.