HDFC book value will go up by Rs 5,000 cr after warrants get converted in shares: Keki Mistry
39.2 lakh shares will be listed upon conversion of warrants into shares. Is there still a balance left?
All the warrants have got converted into shares except for one individual shareholder who could not be contacted. But that is a very small amount. We raised nearly Rs 5,000 crore through the conversion.
What would be the impact on equity capital as well as the book value?
I cannot give you numbers on capital adequacy because we are in the middle of a quarter but book value will go up by Rs 5,000 crore and that is the amount of warrants that has got converted.
What kind of equity capital dilution will this lead to?
It would certainly lead to equity capital dilution but we have raised equity, and so the number of shares have gone up. The amount that has been received on the warrants will start tuning income, adding to profitability.
Who will be the investors whose warrants will get converted?
There are institutional shareholders, mutual funds, insurance companies and some high net worth individuals.
How long will the current capital last to meet the growth needs?
It will last for many years. We do not expect to raise capital for a very long period of time, for several years.
Quite a few HFCs have stated that we will be seeing slower growth. Can we expect the same from HDFC or would you say that you are differentiated or different from the rest of the pack?
Our guidance remains unaltered. We have given a broad guidance to people in the beginning of the year and we are fairly confident that we will be able to meet that guidance.
A few HFCs like Indiabulls Housing have high lending rates. What sort of rate hike can we expect from HDFC?
We have raised our lending rates significantly by 10 bps effective 1st of October. That has already come into play. Now future rate hikes will depend upon how interest rates move in the economy and how cost of funding changes.
Is the bond market situation stabilising? Are you seeing some return of confidence in commercial papers (CPs) short-term borrowing market?
Money is available through commercial paper and also through bond issues. We have raised money through bond issue yesterday. So money is available in the market. The confidence seems to have come back in the market. Stock markets do not reflect that but at the ground level, reasonable confidence is back.
Do you see more pressure coming in the next few months because of the IL&FS situation or would you say the worst is behind us?
I do not think so. The IL&FS issue has been sorted out by the government in some form and a new management has been put in place. I do not expect the IL&FS backlash to come in. You would have seen that despite the tight liquidity conditions that were prevailing in the markets over the last couple of weeks, there was no default whatsoever. So, despite these tight liquidity conditions in the NBFC housing finance companies, all the players in the market are reasonably well positioned.