Dewan Housing Fin’s Rs 10,000 crore bond offer to open Monday

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MUMBAI: Boosted by the success of its Rs 4,000-crore bond offering earlier this month, D?e?wan Housing Finance (DHFL) is embarking on an even larger-sized fund mobilization drive, eyeing Rs 10,000 crore. The company is launching its non-convertible debenture (NCD) offering on August 29 with a simplified structure of 3-year, 5-year and 7-year bonds, offering up to 9.25% yearly rate of interest.

TOI had earlier reported that DHFL, after a good success of its first public offer for bonds, was planning to raise an additional Rs 10,000 crore through bond offering for business expansion and also for repaying part of its high-cost loans.

As of June 30, DHFL’s total loan book was about Rs 63,000 crore. Of its total loans, 52% was bank borrowing. Post its Rs 4,000-crore NCD issue, this had come down to about 46%. DFHL now aims to bring this further down to about 35% in about two years, its officials said.

According to Harshil Mehta, CEO, DHFL, after the completion of its current fund mobilization drive, its overall cost of funds will drop by about 20-25 basis points from the current level of 9.45-9.5%. Post its Rs 10,000-crore fund raising, the company does not aim to tap the public market for funds, Mehta said.

Earlier in the month, the company’s public offer for bonds saw a demand book worth about Rs 19,000 crore compared to its initial offer size of Rs 1,000 crore with a green shoe option to retain up to Rs 3,000 crore from the total demand. DHFL’s was the largest ever public offer for bonds by a private entity in the Indian market. It was also the first bond offering that gave investors the option to receive interest payments linked to consumer price index.