HDB Financial Services, a non-banking financial company (NBFC) owned by HDFC Bank, is set to undertake a significant fundraising initiative. The company has announced plans to raise a substantial amount of Rs 15,000 crore through non-convertible debentures (NCDs) and an additional Rs 500 crore through subordinated bonds. This move is strategically aimed at supporting the expansion of its loan book, a critical component of its growth strategy.

In recent times, HDB Financial Services has demonstrated remarkable growth in the retail financing sector. As of June 30, the company's overall loan portfolio has witnessed a robust increase of 22 percent. This surge has elevated the loan portfolio to Rs 56,287 crore, up from Rs 45,889 crore recorded a year ago. This growth trajectory underscores HDB Financial Services' strong position in the market and its ability to effectively meet the rising demand for retail financing.

The decision to raise funds through NCDs and subordinated bonds is a testament to the company's proactive approach to capital management. NCDs, being debt instruments, offer a fixed rate of return and are a preferred choice for companies looking to raise funds without diluting equity. The addition of subordinated bonds in the fundraising mix further diversifies the company's capital structure, providing a cushion to absorb losses and protect other creditors in case of financial distress.

This fundraising initiative is particularly significant in the current economic climate, where the NBFC sector is navigating through various challenges. By securing additional capital, HDB Financial Services is not only looking to expand its loan book but also to strengthen its financial foundation. This move is expected to enhance the company's lending capacity, allowing it to cater to a broader customer base and tap into new market segments.

Moreover, the expansion of the loan book is likely to contribute positively to HDB Financial Services' overall profitability and market presence. By increasing its lending capabilities, the company can capitalize on emerging opportunities in the retail financing sector, which remains a key driver of economic growth in India.

In conclusion, HDB Financial Services' decision to raise Rs 15,000 crore via NCDs and Rs 500 crore through subordinated bonds marks a strategic step in bolstering its financial position and expanding its loan portfolio. As the company embarks on this ambitious journey, it is poised to reinforce its role as a leading player in the NBFC sector and contribute significantly to the retail financing landscape in India