HDFC Life to raise ₹900 cr via NCDs

HDFC Life Insurance Company has approved issuing non-convertible debentures (NCDs) worth Rs 900 crore on a private placement basis, said the company in a filing.

This was decided at the Capital Raising Committee (CRC) meeting held on February 5, 2025.

A letter intimating this meeting has already issued intimating this meeting dated February 1, 2025. It's the second tranch of the fund raise that has been approved by the Board of Directors on July 15, 2024. 

HDFC Life would be seeking the raising of up to Rs 2,000 crore.

NCDs are a type of debt instrument which cannot be converted into shares or equity. NCDs are issued by companies for raising funds and giving a fixed income to the investors.

The company will issue up to 90,000 NCDs of face value Rs 1,00,000 each amounting to Rs 900 crore, as per the proposal approved by the CRC. There is an option to retain an additional Rs 100 crore through green shoe option taking the total issue size to Rs 1,000 crore. The NCDs will be unsecured, rated, listed, subordinated, redeemable, fully paid-up and non-cumulative.

The company said "We wish to inform that in pursuance to the in-principle approval accorded by the Board in its meeting held on July 15, 2024, the CRC in its meeting held today, inter alia, considered and approved the proposal for raising of funds through issuance of up to 90,000 NCDs of face value Rs 1,00,000 each for an aggregate nominal value of up to Rs 900,00,00,000".

The NCDs shall have a tenure of 10 years from the date of allotment. However, HDFC Life can redeem these after 5 years and thereafter every year.

The NCDs will be listed by the company on the Wholesale Debt Market (WDM) segment of the National Stock Exchange of India Ltd (NSE).

The strategy is a part of HDFC Life's balance sheet strengthening and supporting business growth through this fund raise.