HDFC Bank raises record $1.75 billion in overseas bond sale

HDFC Bank has raised a total of $1.75 billion through a twin bond sale to overseas investors, the largest debt capital market fund raise from an Indian financial institution, as it aggressively collects dollars to support its foreign currency non resident (bank) FCNR (B) deposits.

India’s largest private sector bank raised $500 million from the sale three-year bonds $1.25 billion from five-year securities on Thursday. Both the bonds were priced at tighter spreads than the initial price guidance.

The three year bond was priced at 88 basis points above the three year US treasury, tighter than the initial price guidance of 120 basis points while the five year bond was priced at 100 basis points above the similar maturity US treasury tighter than the 130 basis points initial guidance indicating strong demand from investors, people familiar with the details said.


With the US three year treasury trading at around 4.28%, the three year bond is likely to be priced at around 5.16%. Also, with the five year Us treasury trading around 4.39%, the five year HDFC security is likely to be priced at around 5.39%.

“This is the largest bond sale by any Indian financial institution beating the $1.25 billion raised by State Bank of India (SBI) in 2019. In the current rush too it is the largest beating the $1 billion raised by ICICI on July 23. There were close to 200 orders from investors in both the bonds indicating unprecedented demand, because normally number of orders are in double digits,” said a person aware of the details. A HDFC spokesperson did not reply to an email seeking comment.

The total order book, consisting of bids by investors aggregated more than $7 billion allowing the bank to substantially tighten the spread on the securities. This was the second dollar bonds from HDFC since the RBI announced a special swap arrangement in June through which hedging costs on FCNR (B) deposits garnered by banks are fully taken care of by the central bank.

In June, HDFC Bank had kicked off the dollar bond sale from India by raising $750 million through five year bonds at a coupon of 5.06%.

Since then, Indian financial institutions have been very active. With this HDFC Bank issue, the total amount raised by Indian financial institutions from the dollar bond market has crossed a record $11.75 billion. This week alone ICICI Bank, Kotak Mahindra Bank and IDFC First bank together raised $1.9 billion making it the busiest week for debt from India.

“This bond is a clear validation of HDFC’s brand name and following among the international investment community. Appetite was strong despite this being the second bond sale by the bank within two months. The bank holds high regard among global investors despite the negative press it receives locally,” said another person aware of the issue. Standard Chartered, MUFG, JP Morgan and Bank of America were among the bankers to the issue.

In a note on Thursday Citibank said, the strong order books and subsequent tightening underscore continued global confidence in, and demand for, exposure to the Indian banking sector.

“With strong demand across recent transactions and continued international investor interest in Indian financial sector credit, this trend is expected to continue through the second half of 2026,” Citibank said.