India's largest private lender, HDFC Bank, is looking to raise ​at least $500 million via dollar bonds this week, tapping ‌the central bank's subsidised hedging window for ​overseas borrowings, three sources directly aware of ⁠the matter said on Tuesday. The private bank's issue comes after Reuters reported that state-run lenders State Bank of ‌India and Bank of Baroda were also in talks to raise dollars this ‌way.

HDFC Bank's plans include a five-year ‌bond ⁠issue, with an initial price guidance of ⁠5-year U.S. Treasury yield plus 120 basis points, the sources said.

"The final cutoff should come below 100 bps over ​U.S. Treasury yields, as ‌strong demand is expected in the book-building process," said one of the sources, adding the bank could decide to raise more than $500 million depending ‌on demand.

The sources requested anonymity, as they ​are not authorised to speak to the media, while HDFC Bank did not ⁠reply to a Reuters query seeking comment.

Earlier this month, the Reserve Bank of India said that external ‌commercial borrowings with an average maturity of at least three years by state-run companies and banks would qualify for a swap facility at a fixed rate of 1.5% per annum, compounded semi-annually.

The facility lowers hedging costs and helps ‌cushion a fall in the rupee.

Merchant bankers expect inflows of ​around $15 billion to $20 billion through this route over the next six months.

The proceeds ⁠from HDFC Bank's bond issue will be used ⁠to meet the funding requirements of the bank's foreign branches and foreign subsidiaries, develop and ‌expand business in the foreign offices and meet the bank's general corporate purposes, the sources said, ​citing a term sheet. (Reporting by Dharamraj Dhutia; Editing by Harikrishnan Nair)

Published on June 16, 2026