HDFC Bank shares gain after record $1.75 billion overseas bond raise. What lies ahead?

Shares of HDFC Bank rose over 1% despite the muted market sentiment on Friday after India's largest private lender announced it raised $1.75 billion through a twin bond sale to overseas investors, marking one of the largest debt capital market fundraises by an Indian financial institution.

Shares of the company rose to nearly Rs 733 apiece on NSE, the highest level seen by the stock in nine sessions. HDFC Bank raised $500 million from the sale of three-year bonds and $1.25 billion from the sale of five-year securities on Thursday. Both the bonds were priced at tighter spreads than the initial price guidance. This comes as the private lender continues to aggressively collect dollars to support its foreign currency non resident (bank) FCNR (B) deposits.

HDFC Bank raised $500 million from the sale of three-year bonds and $1.25 billion from the sale of five-year securities on Thursday. Both the bonds were priced at tighter spreads than the initial price guidance. This comes as the private lender continues to aggressively collect dollars to support its foreign currency non resident (bank) FCNR (B) deposits.


The bank’s three-year bond was priced 88 basis points above the three year US treasury, tighter than the initial price guidance of 120 basis points. The five-year bond was priced 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 matter told ET Bureau.

“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

This marks the second time HDFC Bank tapped the dollar bond market since the RBI announced a special swap arrangement in June through which hedging costs on FCNR (B) deposits of the banks are fully taken care of by the central bank.

Also read | HDFC Bank raises record $1.75 billion in overseas bond sale

Earlier this week, 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 matter. Standard Chartered, MUFG, JP Morgan and Bank of America were among the bankers to the issue.

HDFC Bank share price

HDFC Bank shares have seen a sharp downturn this year so far. The sharp selloff began in March after its former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank were not matching with his personal values and ethics.

The stock lost 12% in three days after his resignation on March 18, leading to a massive share sell-off that wiped off around Rs 1.6 lakh crore from the bank’s market value in just three sessions. The private lender then took several measures to address concerns.

The shares of the private lender sharply recovered some of the losses after a strong Q1 business update, most of which however were wiped off after its actual quarterly results. The heavyweight stock hit a fresh 52-week low of Rs 715 apiece on NSE earlier this week, dragging down major indices as well as mutual funds.

HDFC Bank shares have overall fallen around 5% in a month and 27% in 2026 so far. The stock has delivered negative returns of 9% in three years and more than 4% in five years. The company has a market capitalisation of more than Rs 11.17 lakh crore.

Also read | Highest FCNR (B) interest rates: Check PSU vs private sector bank rates for NRIs, OCIs

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