HDFC Bank

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, Oct 2 (Reuters Breakingviews) - The $116 billion HDFC Bank HDBK.NS has taken a step towards restoring its former glory by appointing Anup Bagchi as its new CEO. The boss of Prudential-backed PRU.L ICICI Life Insurance ICIR.NS has the deep banking and financial sector experience required to lead India’s largest private lender. As an outsider, he's also well placed to draw a line under problems that have left it languishing as one of the cheapest of its peers trading at just 1.7 times forward book value. But the path ahead will still be a slog.

Bad governance had become the biggest overhang on the one-time investor darling. In March, Chair Atanu Chakraborty suddenly resigned, citing ethical differences with the bank. In July, the board fined outgoing CEO Sashidhar Jagdishan and other senior executives for "business overreach" in deposit pricing; then within three weeks a group of US-based investors filed a class-action lawsuit against the lender, alleging it failed to properly disclose information about the incident.

And so it's reassuring to see a veteran of the ICICI group, which is widely respected for its professional management, take charge. On the same day of Bagchi's appointment, Anup Kumar Saha, who spent 14 years at ICICI Bank ICBK.NS, was named CEO of the $43 billion Kotak Mahindra Bank KTKM.NS. Both Indian lenders are struggling to bed down professional leadership after decades of heavy involvement by their respective founders.

Bagchi's experience of leading the development of ICICI Bank's internet banking as well as online trading platform ought to improve HDFC's technology architecture and service culture. Yet other operational issues may take longer to fix. Its net interest margin contracted to 3.34% in the year ended March 2026 from 4.1% in 2023, more sharply than at its peers. The lender's share of low-cost deposits as a ratio of total deposits also fell to 34.1% for the full year to March 2026 compared to 44% in 2023, weighing on profitability. In comparison, ICICI Bank's latest annual figure was 41.4%.

As an incoming CEO, Bagchi will have an opportunity to reveal any further bad news hanging over the bank in one go rather than letting it drip out slowly. The turnaround of ICICI Bank offers some hope: Sandeep Bakhshi joined the bank in 2018 when it was struggling with a bad debt crisis and now it trades at 2.3 times forward book value. But one lingering question is whether the 2023 merger of HDFC with its parent, then India's largest housing finance company, has permanently altered something about the bank's agility. The new leader will soon find out.

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CONTEXT NEWS

HDFC Bank on October 1 appointed Anup Bagchi as its CEO effective October 27, 2026, following approval from the Reserve Bank of India.

Bagchi is CEO of ICICI Life Insurance, a position he has held since 2023. Prior to that, he served on ICICI Bank's board as executive director from 2017 until taking over the insurer.

Outgoing CEO Sashidhar Jagdishan’s three-year term ends on October 26. Jagdishan had decided not to seek re-appointment to the role.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

HDFC Bank received Reserve Bank of India approval on October 1, 2026 for Anup Bagchi to serve as managing director and chief executive officer for three years from October 27, 2026, succeeding Sashidhar Jagdishan. The board appointed Bagchi as an additional director from October 2, 2026 and as MD and CEO from October 27, 2026 to October 26, 2029 on RBI-approved remuneration terms, subject to shareholder approval. Bagchi spent more than three decades with the ICICI group since 1992, serving as executive director of ICICI Bank from 2017 to 2023 and as chief executive of ICICI Securities before leading ICICI Prudential Life Insurance from June 2023. The board submitted two names to the RBI on September 12, 2026 for a three-year term ahead of Jagdishan's retirement at the close of October 26, 2026. The bank reported standalone net revenue of about Rs 1.91 lakh crore for FY26 and first-quarter FY27 profit of about Rs 19,062 crore with net interest margin of 3.26%. Deposits and advances grew 14.7% and 15.4% year on year in that quarter, with average retail deposits funding about 80% of growth.

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Rewrites, adding details about Bagchi and his career throughout

By Gopika Gopakumar

MUMBAI, Oct 1 (Reuters) - India's HDFC Bank HDBK.NS, the country's largest private lender, has appointed Anup Bagchi as its next chief executive for a period of three years, it said on Thursday, the first time an external candidate will lead the institution.

Bagchi, 55, succeeds Sashidhar Jagdishan, who decided in August not to seek reappointment after his second three-year term ends on October 26, triggering an unplanned and accelerated succession process.

He takes charge at a time when the country's largest private sector bank by market capitalisation is grappling with governance concerns and a slowing performance.

India's banking rules require banks to recommend at least two potential CEO candidates to the regulator. HDFC Bank had submitted the names of deputy managing director Kaizad Bharucha and outsider Bagchi to the Reserve Bank of India for approval, Reuters reported last month.

Bagchi, currently managing director and CEO of ICICI Prudential Life Insurance, has previously held senior positions at India's second-largest private lender, ICICI Bank, where he led retail and wholesale banking operations. He also has extensive capital markets experience, having served as managing director and CEO of ICICI Securities for six years.

"While Bharucha was more familiar with the bank, this may matter less at CEO level. Anup Bagchi is great with stakeholder relations, including the governmental and regulatory ecosystem, coming from the ICICI group," said Shivaji Thapliyal, banks analyst at Yes Securities. "We see this as positive for HDFC Bank," he added.

HDFC Bank ADR shares were up nearly 5% following the announcement of the new CEO.

RESTORING INVESTOR CONFIDENCE

Jagdishan, who succeeded banking veteran Aditya Puri as head of HDFC Bank after 26 years, had been expected to continue as CEO despite having less than three years left before hitting a regulatory limit on maximum permissible tenure.

His departure comes just months after Chairman Atanu Chakraborty resigned in March, saying certain practices at the bank were at odds with his "personal values and ethics". An independent legal review later found no evidence to substantiate Chakraborty's governance-related concerns.

The leadership changes have added to investor unease at a time when HDFC Bank has faced a prolonged period of stock underperformance following a merger with its parent company HDFC.

Net profit growth slowed to 5% year-on-year in the first quarter of the financial year to end-March 2027, coming in at 190.6 billion rupees ($1.98 billion), while its net interest margin fell to 3.26% compared to 4.36% at ICICI Bank.

Bagchi, an alumnus of India's leading technology and management institutes, faces the task of restoring investor confidence, reviving deposit growth and improving profitability as he manages the leadership transition.

"Bagchi is a well-rounded financial services professional. He also is a strong governance proponent, having served on several regulatory committees," said Vivek Ramji Iyer, a partner and national leader for the financial services risk advisory practice at Grant Thornton.

Former and present colleagues describe the new CEO as a leader known for clarity of thought and an ability to help teams focus on priorities, with an emphasis on efficiency and disciplined execution.

One former colleague cited his use of the acronym "ROTI" - also an Indian bread - standing for "return on time invested", a principle he uses to encourage employees to focus on high-impact work.

(Reporting by Gopika Gopakumar, Ashwin Manikandan and Kashish Tandon, Editing by Louise Heavens
Editing by Louise Heavens, Kirsten Donovan)

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Sept 30 (Reuters) - HDFC Bank Limited HDBK.NS:

• APPOINTS V. N. SRIVATSAN AS CHIEF COMPLIANCE OFFICER

Source text: ID:nBSE6BzQ4C

Further company coverage: HDBK.NS

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** Shares of HDFC Bank HDBK.NS down 1.71% at 722.85 rupees

** Jefferies maintains "buy" on HDBK with a PT of 880 rupees and says clarity on the bank's next CEO could help drive a valuation rerating

** A quick management reorganisation after the CEO appointment, followed by stronger execution, could help restore earnings momentum, Jefferies says

** Brokerage says a shift in loan mix toward higher risk-adjusted segments, including SME, business banking, gold and unsecured personal loans, could support margins and ROA

** Forty analysts have a "buy" rating on avg; median PT is 976 rupees - data compiled by LSEG

** HDBK stock down ~27%, YTD

(Reporting by Urvi Dugar in Bengaluru)

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Sept 24 (Reuters) - Shares of insurance distributor PB Fintech PBFI.NS, lenders and non-bank lenders with sizeable insurance distribution income fell on Thursday after India's insurance regulator proposed curbs on commissions and distribution payouts, raising concerns over earnings growth.

PB Fintech, parent of insurance distribution platform Policybazaar, and Max Financial MAXI.NS led losses among pack, plunging 10% each.

(Reporting by Kashish Tandon in Bengaluru; Editing by Mrigank Dhaniwala)

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Sept 23 (Reuters) - ** Telco Bharti Airtel BRTI.NS overtakes HDFC Bank HDBK.NS to become India's second-most valuable stock

** Reliance Industries RELI.NS remains India's most valuable co, followed by BRTI and HDBK

** BRTI valued at 11.44 trillion rupees ($119.50 billion), above HDBK's 11.42 trillion rupees ($119.29 billion), according to NSE data

** YTD, HDBK down 25% vs 13% dip in BRTI

** Private lender has faced leadership changes and governance scrutiny, including senior executive resignations and alleged irregularities

** BRTI has seen steady growth in recent quarterly earnings, boosted by increasing demand for 4G/5G data

** Both stocks rated "buy" on avg - data compiled by LSEG

** BRTI last up 0.7%, HDBK up 0.2%

($1 = 95.7300 Indian rupees)

(Reporting by Aleef Jahan in Bengaluru)

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Rewrites throughout

By Surbhi Misra and Gopika Gopakumar

Sept 15 (Reuters) - HDFC Bank HDBK.NS rose as much as 3.2% on Tuesday, in the biggest percentage gain in over four months, after India's largest private lender moved ahead with its CEO succession process, submitting two names to the central bank.

HDFC Bank shared the update on Saturday without disclosing the candidates, as it looks to replace CEO Sashidhar Jagdishan, who will step down when his term ends in late October.

Reuters reported last month that HDFC Bank Deputy Managing Director Kaizad Bharucha was likely to be one of the two candidates, with the bank also considering an external candidate. CNBC-TV18 reported on Sunday, citing sources familiar with the matter, that ICICI Prudential Life Insurance CEO Anup Bagchi was the external name being considered.

HDFC Bank did not immediately respond to a Reuters' request for comment. Bagchi and Bharucha did not immediately respond to requests for comment.

CEO succession has been a key investor concern for HDFC Bank since Jagdishan announced on August 29 that he would step down. Brokerages say that clarity on leadership would abate investor worries, facilitating a stock re-rating.

HDFC Bank shares, which were about 40% ⁠foreign-owned at June-end, have fallen 27.2% this year. The decline accelerated after former chairman Atanu Chakraborty left, citing governance concerns, though a subsequent external review found no evidence substantiating the issues raised.

INSIDER OR OUTSIDER?

Jefferies analysts said Bharucha would be a simpler choice for the bank, given his experience in leading the corporate, business banking and retail asset businesses. They say this could prepare the bank for a smoother transition for the longer-term.

The brokerage report added that investors will be wary if any former state-owned bank executive is appointed to the post and maintained its "buy" rating with an 880-rupee price target.

Analysts at Nomura took the view that an internal appointment could ensure continuity and limit disruption, while a strong external candidate could offer a strategic reset and support a sustained re-rating, particularly with a clear roadmap on growth, deposits, margins and returns.

The brokerage maintained its "buy" rating and 950-rupee price target.

Macquarie Research on the other hand, suggests an external candidate for the MD & CEO would bring a fresh perspective and clean mandate, resulting in a re-rating of the stock.

HDFC Bank shares were up 1.84% at 721.15 rupees apiece as of 11:59 am IST.

(Reporting by Surbhi Misra and Gopika Gopakumar; Editing by Ronojoy Mazumdar)

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HDFC Bank’s board approved submitting two preferred candidates to the Reserve Bank of India for appointment as managing director and chief executive for three years, subject to approval. It approved the reappointment of V. Srinivasa Rangan as an executive director from November 23, 2026, and the appointment of Jimmy Tata as an executive director for three years from RBI approval. The bank also created a fourth whole-time-director position to strengthen oversight and succession planning across its subsidiaries. HDFC Bank’s current chief executive was due to leave on October 26, 2026.

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Sept 12 (Reuters) - HDFC Bank's HDFC.NS board has submitted two candidates to the Reserve Bank of India for the role of CEO, the lender said on Saturday, formally starting the succession process for Sashidhar Jagdishan, who is due to retire later this year.

The bank did not disclose the names of the candidates.

Indian banking rules require private-sector banks to obtain prior RBI approval for the appointment of their managing director and CEO, giving the regulator a key role in vetting senior management.

Jagdishan, who has led the bank since 2020, is set to step down at the end of his second term in October.

The bank also moved to bolster its board, reappointing V. Srinivasa Rangan as a whole-time director, a regulatory designation for full-time bank directors, and appointing Chief Credit Officer Jimmy Tata to the board in the same capacity.

Deputy Managing Director Kaizad Bharucha is already a whole-time director.

The bank also said it would create a fourth whole-time director position, to be held by the incoming CEO once appointed.

(Reporting by Chandini Monnappa in Bengaluru. Editing by Mark Potter)

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MUMBAI, Sept 8 (Reuters) - India's HDB Financial Services HDBF.NS has accepted bids worth 20 billion rupees ($210.86 million) for the reissue of 8.05% August 8, 2029 bonds, three merchant bankers said on Tuesday.

The issuer will offer a yield of 7.9606% and had invited bids from bankers and investors earlier in the day, they said.

The company did not reply to a Reuters email seeking comment.

Here is the list of deals reported so far on September 8:

*Size includes base plus greenshoe for some issues

($1 = 94.8500 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)

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-- Source link: https://tinyurl.com/3eke4c4v

-- Note: Reuters has not verified this story and does not vouch for its accuracy

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HDFC Bank's managing director and chief executive, Sashidhar Jagdishan, said he would not seek reappointment and was due to retire at the close of business on October 26, 2026. The board recorded his decision after he reiterated it despite persuasion and said it would fast-track the selection of a successor. Rajiv Kumar became the bank's RBI-approved part-time chairman in July 2026. HDFC Bank reported standalone net revenue of ₹463.6 billion and net profit of ₹190.6 billion for the June quarter, with a capital adequacy ratio of 19.6%.

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Aug 29 (Reuters) - HDFC Bank Limited HDBK.NS:

• HDFC BANK - SASHIDHAR JAGDISHAN DECIDES NOT TO SEEK RE-APPOINTMENT AS MD&CEO OF HDFC BANK

• HDFC BANK - SASHIDHAR JAGDISHAN TO RETIRE FROM HDFC BANK ON OCTOBER 26, 2026

• HDFC BANK - TO FAST-TRACK SELECTION AND APPOINTMENT OF MD&CEO SUCCESSOR

Source text: ID:nBSE8zv4jS

Further company coverage: HDBK.NS

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By Bharath Rajeswaran and Vivek Kumar M

Aug 27 (Reuters) - Shares of HDFC Bank HDBK.NS, India's top private lender, fell for a third straight session on Thursday, dragging the country's benchmark stock index amid concerns over legal, regulatory and leadership challenges.

The shares slipped as much as 2.37% to 710 rupees, a 29-month low, extending their year-to-date decline to about 28%, on course for their worst annual drop since 2008.

HDFC Bank is the heaviest-weighted stock on the benchmark Nifty 50 .NSEI, which has fallen 7.6% this year.

The lender is facing a possible U.S. class-action lawsuit over alleged illegal payments worth 450 million rupees ($4.7 million) to Maharashtra State Road Development Corporation to induce large deposits.

On August 13, Glancy Prongay Wolke & Rotter and the Law Offices of Howard G. Smith, filed a proposed federal securities class action in a U.S. District Court against HDFC Bank and two of its executives over the alleged illegal payments. Several other law firms have also issued alerts to HDFC Bank investors regarding the proposed class action.

"The U.S. class-action lawsuit has emerged as a near-term overhang, denting sentiment and tempering investor optimism despite the stock's attractive valuations," said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.

"The Street is likely to remain cautious until further details emerge."

An HDFC Bank spokesperson told Reuters that the bank "believes the lawsuit is without merit and intends to vigorously defend itself."

"In the United States, these types of shareholder lawsuits are incredibly common after a company experiences a stock drop, and many companies listed in the U.S. routinely defend these lawsuits each year," the spokesperson said.

Earlier this week, Mint newspaper reported, citing investors, that more than 75 clients who bought Carlisle's Luxembourg Life Fund through HDFC Bank's Dubai operations were planning to approach the Indian Prime Minister's Office, the central bank and overseas regulators over alleged mis-selling, losses and delayed redemptions.

HDFC Bank told Reuters it does not provide any advice in relation to third party products and that it was ultimately for the customers to make their own informed decisions.

The lender's shares had slid in March after its part-time chair abruptly resigned citing ethical differences with management.

Uncertainty over chief executive Sashidhar Jagdishan's tenure also remains an overhang for the stock, traders said. Jagdishan's term ends on October 26.

A temporary extension would prolong succession concerns and could pressure the stock further, while a three-year renewal would remove a key uncertainty, Macquarie said.

The bank did not respond to a query on the CEO reappointment.

(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Mrigank Dhaniwala)

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By Dharamraj Dhutia

MUMBAI, Aug 21 (Reuters) - HDFC Bank HDBK.NS raised $1.75 billion through a dual-tranche dollar bond sale, the largest one-shot debt fundraising by an Indian bank, three merchant bankers said on Friday, as banks scramble to take advantage of a concessional window from the central bank.

India's largest private lender on Thursday raised $1.25 billion through the sale of five-year papers, equivalent to the largest single-tranche issuance, and $500 million through three-year papers via its GIFT City branch, it said in a notice to stock exchanges.

Having raised an aggregate $2.50 billion, HDFC has now topped the chart of banks that have raised money through dollar bond sales since June, when the Reserve Bank of India facility was opened. ICICI Bank ICBK.NS came in second with $2.05 billion.

The issues attracted bids of about $7 billion of orders, which was far higher than what the bank expected, encouraging it to accept a larger amount, said a banker.

The three-year papers were priced at 88 basis points over comparable U.S. Treasuries, while the five-year papers were 100 bps over. Both were tighter than the initial guidance of 120 bps and 130 bps, respectively, showing strong investor demand.

The spread was, however, higher than the 90 bps HDFC paid for a five-year issue for $750 million in June.

The bankers who spoke to Reuters for this story requested anonymity as they are not authorised to speak to the media.

Market intelligence firm CreditSights, which has an "outperform" rating on HDFC, had expected the final pricing at a spread of 95 bps and 105 bps for the three-year and five-year papers. It, however, sees the fair value at a spread of 82 bps and 92 bps.

In the last few days, banks have been scrambling to complete their dollar issuances, with most funds being used to provide leverage to customers who will be depositing funds under the discounted dollar deposit scheme.

The RBI last week said that the window provided to banks for hedging non-resident deposits would end a month early on August 31. The central bank expects close to $80 billion in inflows through these schemes.

(Reporting by Dharamraj Dhutia; additional reporting by Khushi Malhotra; Editing by Harikrishnan Nair)

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By Dharamraj Dhutia

MUMBAI, Aug 20 (Reuters) - India's largest private lender, HDFC Bank HDBK.NS, is tapping the dollar bond market for the second time in two months, as banks scramble to close overseas fundraising before a special central bank FX swap window closes.

The Mumbai-based lender plans to raise at least $500 million each through three-year and five-year bonds via its GIFT City branch, the bankers said, requesting anonymity as they are not authorised to speak to media.

"Investor calls have been lined up, and the final pricing for the issue should be completed by Friday," one of the bankers said.

"Since this would be the last issue before the end of August, we will not be surprised if the final quantum easily surpasses $1 billion."

HDFC Bank did not reply to a Reuters query seeking comment.

Last week, the Reserve Bank of India decided to prematurely close a discounted swap facility provided to banks for hedging non-resident deposits. The central bank expects close to $80 billion in inflows via subsidised swap facilities opened in June, central bank governor Sanjay Malhotra told the Financial Express newspaper.

HDFC Bank's peer ICICI Bank ICBK.NS has also targeted investors based in the United States for its dollar bonds issued over the last few weeks.

If completed, the latest bond sale would take HDFC Bank's total proceeds from such issues to $1.75 billion, the most after ICICI Bank.

Another private lender, IDFC First Bank IDFB.NS, has raised $600 million through its debut dollar debt sale with three-year maturity through a private placement, it said in a statement on Wednesday.

Indian lenders have so far raised $7.55 billion via dollar bonds since the concessional hedging facility was announced on June 5. The swap window will close on August 31, a month before the initial deadline of September end.

(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)

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The Reserve Bank of India approved Life Insurance Corporation of India's application to acquire an aggregate holding of up to 9.99% in HDFC Bank. LIC held 4.11% of the bank's paid-up share capital as of 14 August 2026. The approval was subject to banking, foreign-exchange, securities-market and other applicable regulatory requirements. HDFC Bank reported deposits of ₹31,708bn and gross advances of ₹30,608bn in the first quarter of FY27.

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By Bharath Rajeswaran

Aug 19 (Reuters) - Robust profit growth for India's Nifty 50 companies has brightened the outlook for domestic markets, but global risk aversion and a strong IPO pipeline could temper a broader rally in the near term, according to Abakkus Investment Managers.

The benchmark Nifty 50 .NSEI and Sensex .BSESN are down 7.9% and 9.8% year-to-date amid crude-driven inflation and a record $25 billion in foreign outflows. In comparison, regional peers, such as South Korea and Taiwan, are up about 50% each.

Abakkus, which manages assets worth $5.2 billion, sees elevated crude prices, rising global yields and volatility in the AI trade as key external risks for Indian equities.

"Domestically, consumer demand and corporate profitability is strong as seen in the better-than-expected Q1 results, but globally, they are not," Aman Chowhan, head of equities of Alternates at Abakkus AMC, told Reuters on Wednesday.

However, Chowhan said that "after a weak first half, India should outperform EM and Asian peers relatively, but its direction will still be dictated by global risk sentiment, with crude and the AI trade likely setting the market's tempo."

Expanding equity supply is another hurdle, with IPOs, qualified institutional placements, and block deals competing for limited capital, Chowhan said.

"Every other day there's an IPO… some promoter selling, some QIP," Chowhan said, adding "fresh issues and institutional placements are siphoning liquidity from secondary markets as investors chase listing gains and growth stories."

After 27 mainboard IPOs raised 225.72 billion rupees ($2.36 billion) in the first half of 2026, a packed August pipeline signals sustained primary market supply in the near term.

Chowhan estimates that 40-50% of capital may, therefore, be absorbed by such offerings, restricting a broader market rally.

Against this backdrop, Abakkus favors leading niche NBFCs and mid-sized banking stocks, citing stronger credit growth.

It also expects foreign investors to return to equities only gradually as years of weak returns in key sectors, such as financials and IT, have made them cautious of increasing their exposure.

($1 = 95.7525 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema)

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By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, Aug 17 (Reuters) - Indian lenders are rushing dollar loan and bond issues over the next two weeks after the central bank unexpectedly advanced the end date for an FX swap facility that banks were using for hedging exposure to deposits raised from diaspora.

As part of a raft of measures to boost inflows, lenders were permitted to use these overseas borrowings to offer loans to non-resident Indians. Banks' overseas fundraising had also been subsidised.

Now, with the Reserve Bank of India announcing the closure of the forex swap window for August 31, a month earlier than initially planned, Indian private and state-run banks are on track to raise at least $5 billion through a combination of bonds and loans, four bankers said.

"Some of the fund raising plans have been brought forward to utilize the last few days," Akshay Naik, India head of debt capital markets at Citi, said.

"We will have one of the busiest windows for the next 6-8 days from India. Few institutions who are not ready may need to drop their plan if it was solely meant for FCNR leverage."

Large private-sector lenders such as ICICI Bank ICBK.NS and HDFC Bank HDBK.NS are in talks to raise about $1.5 billion each via dollar bonds and loans, while peers including Axis Bank AXBK.NS, YES Bank YESB.NS, RBL Bank RATB.NS and Kotak Mahindra Bank KTKM.NS are planning to raise at least $500 million each through overseas debt markets, bankers said.

State-run lenders State Bank of India SBI.NS, Bank of Baroda BOB.NS, Punjab National Bank PNBK.NS, Canara Bank CNBK.NS, Union Bank of India UNBK.NS, Bank of India BOI.NS and Central Bank of India CBI.NS are targeting dollar raises of $250 million to $500 million each, with the larger banks likely to target bigger issues, the bankers said.

None of the lenders replied to Reuters emails seeking comment.

All the bankers declined to be named as the discussions are private.

BANKS ON TRACK FOR RECORD DOLLAR FUNDRAISING

Indian lenders have raised a combined $5.93 billion through dollar bond sales and loans so far this year, according to LSEG data through August 11.

The tally has climbed by another $1.2 billion, following debt sales by two large state-run lenders last week.

Over the last 15 years, banks' annual foreign borrowing topped $6 billion on three occasions, including in 2013, when the RBI had opened a swap window.

"Would expect $5-7 billion of additional bond and loan issuances for the remainder of year," Naik said.

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Mrigank Dhaniwala)

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By Dharamraj Dhutia

MUMBAI, Aug 12 (Reuters) - State Bank of India SBI.NS, the country's largest lender, drew strong demand in its return to the public dollar bond market after nearly a year, with pricing tightening sharply from initial guidance, three merchant bankers said on Wednesday.

SBI raised $500 million through a five-year dollar bond issued via its London branch, the lender said in a stock exchange filing late on Tuesday.

These bonds will be priced at a spread of 88 basis points over U.S. Treasuries, sharply below initial guidance of 120 bps. The notes carry a coupon of 5.25%, payable semi-annually.

The final spread was broadly in line with CreditSights' expectation of 90 basis points, although the research firm expects it to tighten further to around 80 basis points in the secondary market.

Spreads on dollar bonds issued by Indian borrowers have widened in recent weeks on expectations of heavy supply following the Reserve Bank of India's swap concession window, while demand has been tempered by attractive rates on foreign-currency deposits.

"As we had anticipated, some of this spread premium has begun to fade as supply is absorbed... We have an outperform recommendation on SBI," CreditSights analysts said in a note.

The lender witnessed tightest pricing, after ICICI Bank sold notes at 100 bps, while HDFC Bank sold notes at a spread of 90 bps over Treasuries.

SBI had planned to raise $1 billion through a public dollar bond issue in June, but deferred the sale due to higher borrowing costs following heavy issuance by Indian lenders.

The bank subsequently raised $600 million through a private placement of three-year dollar bonds at a spread of 100 basis points over the Secured Overnight Financing Rate (SOFR).

The issue comes at a time when Indian banks are making a beeline for dollar issues after the RBI's swap facility announced in June made overseas borrowing cheaper.

Large private lenders, including HDFC Bank, Axis Bank and ICICI Bank have raised funds through dollar bonds in June and July.

Meanwhile, bankers expect SBI to tap the market again in a few weeks for raising dollars, as the board has approved raising of up to $2 billion through bonds sold in dollar or any other major currency in this financial year.

(Reporting by Dharamraj Dhutia; Editing by Sherry Jacob-Phillips)

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Recasts with details and context

By Dharamraj Dhutia

MUMBAI, Aug 11 (Reuters) - State Bank of India SBI.NS, the country's largest lender, is returning to the public dollar bond market after nearly a year and is expected to see strong demand for its planned five-year issue, three merchant bankers said on Tuesday.

The bonds will be issued through SBI's London branch, with initial price guidance set at roughly 120 basis points over U.S. Treasuries.

The issue comes at a time when Indian banks are making a beeline for dollar issues after the Reserve Bank of India in June a opened a swap facility, making overseas borrowing cheaper.

SBI is expected to raise at least $500 million, although the final size will depend on investor demand.

The lender has begun marketing the bonds and is expected to complete the sale by the end of the week, the bankers said, declining to be identified as they were not authorised to speak to the media.

SBI did not immediately respond to a Reuters email seeking comment.

One banker said SBI was offering a sizeable spread premium, although final pricing could tighten by as much as 30 basis points. The banker also expected the deal size to reach $1 billion or more.

Fitch Ratings has assigned an expected BBB- rating to the proposed senior unsecured notes.

The notes will be direct, unsecured and unsubordinated obligations of SBI, ranking equally with its other unsecured and unsubordinated debt, the rating agency said.

SBI had planned to raise $1 billion through a public dollar bond issue in June, but deferred the sale due to higher borrowing costs following heavy issuance by Indian lenders.

The bank subsequently raised $600 million through a private placement of three-year dollar bonds at a spread of 100 basis points over the Secured Overnight Financing Rate (SOFR).

Large private lenders, including HDFC Bank, Axis Bank and ICICI Bank, raised funds through dollar bonds in June and July.

(Reporting by Dharamraj Dhutia; Editing by Sherry Jacob-Phillips)

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By Bharath Rajeswaran

Aug 7 (Reuters) - India's market outlook is strengthening as bank credit growth reaches its fastest pace in more than a decade, foreign equity inflows return and central bank measures support the rupee, according to Jefferies.

"There are some positives to be aware of as regards the Indian domestic story," Christopher Wood, Jefferies' global head of equity strategy, said in his latest GREED & fear note published on Friday.

Against this backdrop, Jefferies has reshaped its India long-only portfolio. HDFC Bank HDBK.NS, India's largest private lender and the heaviest stock in benchmark indexes, is being removed alongside PolicyBazaar-owner PB Fintech PBFI.NS.

MCX MCEI.NS and Lenskart Solutions LENS.NS will replace them, while REC RECM.NS makes way for Bajaj Finance BJFN.NS. Eternal's ETEA.NS allocation rises by one percentage point, funded by a reduction in Bharti Airtel BRTI.NS.

Foreign investors bought a net $2.12 billion of domestic equities in July as India benefited from the unwind out of the memory chip trade. However, they remain net sellers for the year, with outflows totaling $25.86 billion, according to National Securities Depository.

The more important signal, Wood said, is the acceleration in domestic lending, which has climbed to 17–18% year-on-year, led by corporate lending of about 20%. Loans to agriculture and retail borrowers are also expanding at healthy rates, underscoring broad-based demand.

Policy-driven inflows are adding a macro cushion. The Reserve Bank of India's foreign-currency inflow scheme, including non-resident deposits, external commercial borrowings and foreign-currency bonds, had mobilized about $41 billion by the end of July, and Jefferies expects inflows to reach $80 billion–$100 billion by the September 30 deadline.

The removal of tax on interest income on foreign purchases of government bonds has also generated $8.7 billion in net inflows since early June, per exchange data.

"All this increases the likelihood that the rupee should stabilise," Wood said. The currency recovered to 95.17 per U.S. dollar, as of July 31, from a low of 96.96 in May.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema)

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