India’s largest private lender,
HDFC Bank, is looking to raise at least $500 million
via dollar bonds this week, tapping the central bank’s
subsidised hedging window for overseas borrowings, three sources
directly aware of the matter said on Tuesday.
The private bank’s issue comes after Reuters reported that
state-run lenders State Bank of India and Bank of
Baroda were also in talks to raise dollars this way.
HDFC Bank’s plans include a five-year bond issue, with an
initial price guidance of 5-year U.S. Treasury yield plus 120
basis points, the sources said.
“The final cutoff should come below 100 bps over U.S.
Treasury yields, as strong demand is expected in the
book-building process,” said one of the sources, adding the bank
could decide to raise more than $500 million depending on
demand.
The sources requested anonymity, as they are not authorised
to speak to the media, while HDFC Bank did not reply to a
Reuters query seeking comment.
Earlier this month, the Reserve Bank of India said that
external commercial borrowings with an average maturity of at
least three years by state-run companies and banks would qualify
for a swap facility at a fixed rate of 1.5% per annum,
compounded semi-annually.
The facility lowers hedging costs and helps cushion a fall
in the rupee.
Merchant bankers expect inflows of around $15 billion to $20
billion through this route over the next six months.
The proceeds from HDFC Bank’s bond issue will be used to
meet the funding requirements of the bank’s foreign branches and
foreign subsidiaries, develop and expand business in the foreign
offices and meet the bank’s general corporate purposes, the
sources said, citing a term sheet.
(Reporting by Dharamraj Dhutia; Editing by Harikrishnan Nair)
Published on June 16, 2026
