HDFC Bank board to mull issue of bonus shares

HDFC Bank board to mull issue of bonus shares

HDFC Bank, one of India's leading financial institutions, is set to explore the potential issuance of bonus shares. The decision will be discussed at an upcoming board meeting, scheduled for July 15, 2025 [3]. This move comes amidst the bank's strong financial performance and strategic initiatives aimed at enhancing its balance sheet and market position.

The bank's Managing Director and CEO, Sashidhar Jagdishan, has highlighted the bank's robust growth trajectory in the last financial year, FY25. Net profit increased by 10.7% to Rs 67,347.4 crore, while net interest income grew by 13%. Advances grew by 5.4% to Rs 26,19,609 crore, and deposits surged by 14.1% to Rs 27,14,715 crore [2]. The bank's credit-to-deposit ratio was reduced to 96%, and high-cost borrowings decreased to 14%, indicating a disciplined approach to loan growth and asset quality.

The potential bonus issue aligns with the bank's strategy to strengthen its balance sheet and attract more investors. Bonus shares are typically issued at a lower price than the current market price, making them an attractive proposition for shareholders. However, the final decision will depend on various factors, including regulatory approvals and shareholder consensus.

The bank's recent Initial Public Offering (IPO) and stake sale have further bolstered its financial position. HDFC Bank offloaded 13.51 crore equity shares through an Offer for Sale (OFS) priced at ₹740 per share, resulting in a net cash inflow of ₹9,814.52 crore [3]. This strategic move has allowed the bank to retain a significant stake in its subsidiary, HDB Financial Services Ltd (HDBFS), while enhancing its liquidity and capital base.

The upcoming board meeting will also consider the unaudited standalone financial results for the quarter ended June 30, 2025 (Q1 FY26). This will be the company's first quarterly financial disclosure post-IPO [3]. The bank's shareholders are expected to receive the AGM notice and the Integrated Annual Report for FY 2024–25 electronically, as the AGM will be held via video conferencing on August 8, 2025 [4].

In conclusion, HDFC Bank's potential issuance of bonus shares is a significant development that reflects the bank's strategic focus on growth and financial health. The upcoming board meeting will provide more clarity on the bank's plans and the potential benefits for shareholders.

References:
[1] https://www.etnownews.com/markets/free-shares-for-investors-first-ever-bonus-issue-announced-12-ratio-record-date-in-july-article-152284105
[2] https://economictimes.indiatimes.com/industry/banking/finance/banking/confident-of-growing-our-advances-on-par-with-industry-in-fy26-hdfc-bank-ceo/articleshow/122439591.cms
[3] https://hdfcsky.com/news/hdb-financial-services-board-to-approve-q1-fy26-results-today
[4] https://www.businessworld.in/article/hdfc-bank-sets-8-august-for-agm-q1-results-on-19-july-563478