DHFL taps masala bonds, likely to raise Rs 1,300 crore
MUMBAI: Dewan Housing Finance is raising about Rs 1,300 crore by selling rupee-denominated bonds overseas, signalling a likely revival in home-financing demand by end users in the Indian property market plagued until recently by a supply overhang.
This is the first ever bond sale by any mid-market Indian private company in the five-year category after the local banking regulator relaxed rules for the so called masala bonds, two people familiar with the matter told ET.
The issue opens for subscription Wednesday in London with an initial price guidance of 8.95 per cent.
The bond sale is unrated, but domestic rating company Care has assigned DHFL the top-grade - triple-A. Indian companies led by the largest mortgage lender HDFC have already tapped the financing market. Government-owned companies such as NTPC or IRFC have also raised money.
DHFL plans to raise up to Rs 13,000 crore (or $2 billion) over a period of time in different tranches this year as the company has filed a Euro Medium Term Note (EMTN) programme mentioning the ballpark figure.
UK-based Sun Global Investments and Barclays are two of the arrangers that are helping the company to sell the securities. They could not be contacted immediately.
In September last year, the Reserve Bank of India eased norms for selling masala bonds saying they will be treated as external commercial borrowings from October 3, a move that freed up more investments space by overseas investors.
The success of this issue should trigger a series of such bond sales, billed as a non-starter even a few months ago, dealers said.
In masala bonds, global investors take the exchange rate risk as they earn higher rates compared to normal dollar-denominated bonds.
DHFL increased its net profit by 25 per cent to Rs 306 crore during October-December quarter in FY18.
During the three-month period, loans sanctioned amounted to Rs 16,552 crore as against Rs 9,459 crore in the previous corresponding quarter, showing an increase of 75 per cent.
This is the first ever bond sale by any mid-market Indian private company in the five-year category after the local banking regulator relaxed rules for the so called masala bonds, two people familiar with the matter told ET.
The issue opens for subscription Wednesday in London with an initial price guidance of 8.95 per cent.
The bond sale is unrated, but domestic rating company Care has assigned DHFL the top-grade - triple-A. Indian companies led by the largest mortgage lender HDFC have already tapped the financing market. Government-owned companies such as NTPC or IRFC have also raised money.
DHFL plans to raise up to Rs 13,000 crore (or $2 billion) over a period of time in different tranches this year as the company has filed a Euro Medium Term Note (EMTN) programme mentioning the ballpark figure.
UK-based Sun Global Investments and Barclays are two of the arrangers that are helping the company to sell the securities. They could not be contacted immediately.
In September last year, the Reserve Bank of India eased norms for selling masala bonds saying they will be treated as external commercial borrowings from October 3, a move that freed up more investments space by overseas investors.
The success of this issue should trigger a series of such bond sales, billed as a non-starter even a few months ago, dealers said.
In masala bonds, global investors take the exchange rate risk as they earn higher rates compared to normal dollar-denominated bonds.
DHFL increased its net profit by 25 per cent to Rs 306 crore during October-December quarter in FY18.
During the three-month period, loans sanctioned amounted to Rs 16,552 crore as against Rs 9,459 crore in the previous corresponding quarter, showing an increase of 75 per cent.