HDFC Bank on a roll

Mumbai: Shares of HDFC Bank on Friday hit a record high after the private sector lender announced its intention to raise funds.

The bank has said its board will meet on December 20 to "consider a proposal to raise funds by the issue of equity shares/depository receipts and other securities, including through Qualified Institutions Placement (QIP)/American Depository Receipts (ADRs) programme, preferential allotment or such other methods or combinations as may be decided''.

The board of the lender will also consider a preferential issue to promoter HDFC.

While the announcement was made after the market hours, the shares of HDFC Bank on Friday opened marginally higher and then built on its gains.

It soon hit a new record high of Rs 1,887.45 during intra-day trades. The stock finally closed at Rs 1873.05, a gain of 1.95 per cent, or Rs 35.85, over the previous close. Close to 1.16 lakh shares were transacted on the BSE.

Investors also reacted positively to HDFC's move to raise funds.

The board of the leading housing finance company will meet on December 19 by raising funds through a preferential issue or QIP to subscribe to the securities of HDFC Bank. On the BSE, the scrip finished at Rs 1,722.85, a gain of Rs 13.35 over its last close.

Various banks have in the recent past raised funds (or are in the process of raising) through various channels.

For instance, Punjab National Bank and Union Bank raised Rs 7,000 crore via QIP. Similarly, Bank of Maharashtra raised little over Rs 313 crore, Syndicate Bank is also looking to mobilise around Rs 1,200 crore. These fund-raising exercise by the PSU banks come ahead of the much awaited Rs 2.11 trillion bank recapitalisation package.

HDFC Bank