HDFC on Wednesday launched a qualified institutional placement (QIP) offering to raise as much Rs 14000 crore. Fundraising will be in the form of Equity and warrant offering. We believe this fundraising in this environment would be positive for HDFC.
We expect HDFC would use this capital for growth and inorganic opportunity. Moratorium reduced from 27% to 22%. 39.2% of non-individual book opted for a moratorium, however, only 10.9% of 39.2% has not paid any EMI remaining has paid part or full EMI.
HDFC has one of the hight stage 3 coverage among HFC. It has more than required provision on exiting GNPA. We expect HDFC Ltd will bale to gain market share, as it has been able to raise debt at a competitive rate, whereas other players are finding it difficult to raise debt at competitive rate. At today closing price HDFC Ltd Core business is trading at 1.4x FY22 Book Value, which we believe inexpensive, considering superior management, higher provisioning on exiting non-performing asset and sufficient Capital adequacy.”