HDFC Bank raises record $1.75 billion in overseas bond sale

HDFC Bank has successfully raised a record $1.75 billion through a dual bond sale to overseas investors, marking the largest debt capital market fund raise from an Indian financial institution. The bank collected $500 million from three-year bonds and $1.25 billion from five-year securities, both priced at tighter spreads than initially anticipated.

The three-year bond, priced at 88 basis points above the US three-year treasury, and the five-year bond, priced at 100 basis points above the US five-year treasury, saw strong demand from investors. This surpasses the $1.25 billion raised by State Bank of India in 2019 and the $1 billion raised by ICICI Bank in July. The total order book exceeded $7 billion, allowing HDFC Bank to significantly tighten the spread.

This is the second dollar bond sale for HDFC Bank since June, when the RBI introduced a special swap arrangement to cover hedging costs on foreign currency non-resident (bank) deposits. Since then, Indian financial institutions have collectively raised a record $11.75 billion from the dollar bond market, with additional funds raised by ICICI Bank, Kotak Mahindra Bank, and IDFC First Bank.

The bond sale is seen as a validation of HDFC Bank's reputation among global investors, despite facing local negative press. Major banks participating in the issue include Standard Chartered, MUFG, JP Morgan, and Bank of America. Citibank predicts this trend of strong demand for Indian banking sector bonds to continue through the second half of 2026.