Stock Exchange Board of India (SEBI) offers clarification on the news item dated June 28, 2020, appearing in the print and online media titled 'HDFC Bank may raise up to Rs 13,000 crore via QIP, ADRs' as purely baseless and speculative.
The clarification intimation is offered by SEBI under Regulation 30 of the Listing Obligations And Disclosure Requirements Regulations, 2015 by the HDFC Bank Limited. As a policy, the Bank refrains from commenting on speculation and rumors circulating in the market on print and online media.
However, this notice by the SEBI is to inform that the Bank in question has complied with and continues to comply with the relevant disclosure norms under the Regulations.
Raising capital through QIP and ADRs
In the news report published on June 28, it said, the bank was looking at shoring up capital and join the list of growing Indian banks by raising Rs.10,000 to Rs.13,000 crore by issuance of American Depository Receipts (ADRs) in the third quarter of 2020-21 and share sales in India.
The equity capital was to be raised using a combination of a qualified institutional placement (QIP) plus ADR issuance. But the plans announced by HDFC Bank was at a nascent stage due to the unpredictable Covid-19 situation and circumstances.
According to HDFC Bank's policy, "It does not comment on market speculations," a spokesperson said. It was much anticipated that the country's largest private sector lender will be approaching the market with its new share offerings in the next four-five months, but this announcement was a hoax.
Dealing with the impact of the moratorium and slowing credit growth on most large banks, this move by HDFC Bank was aimed at strengthening its capital buffers and liquidity such that the bank is prepared to deal with any potential rise in slippages in the credit books after September 2020.