The Housing Development Finance Corporation Bank finally took a breath of relief when Reserve Bank of India gave permission to raise as much as Rs. 3000 crores through the help of masala bonds. Such bonds are ways to raise capital in overseas but in Indian denomination rather than in local currency. Although the bank had already exceeded the limit of raising Rs 5000 crores, due to the newly emerging route, the freshly granted permission will now support HDFC to raise more money.
Generally, an enterprise is allowed to increase funds through masala bonds, outside the country, in four tranches and thefirst step of cash raising have already been done. The permission for the second rise in such ways tend to develop in a pattern and only after it is granted, one can hassle-free raise certain cash of amount. HDFC will have its share of fund amount of Rs. 3000 crores at an overseas platform with all the denomination in Indian currency.
The rate of interest at first section came at 8.3% wherein the second phase might comprise an interest rate of 7.25% hence conceding that the developments in hike regarding similar situation might en routein a difficult manner. Thoughnot at all a favourable time to raise money as Fed rates have been increasing lately along with taking a look at the present scenario due to demonetization rule, the firm has taken care of taking a call over fundraising matters after the holiday seasons where a new set of funds will be raised after the following amount have been retained.
As per the latest reports carried out by RBI, the funding and lending side of would act upon 2.20% and 2.35%, individually thus reiterated the guidelines so as to maintain the interest rates. The current series of raising fund through masala bonds might quantify a dip in demand where there may also occur a surge in prices. The mode to cut rates by the central bank might help such home-country-based financial units to maintain a balance, bring elasticity and avoid the post-Lehman situation of 2008-09 (the depreciation period) in the nation.