The merger of HDFC and HDFC Bank is expected to boost opportunities for growth for the merged group. The board of the largest mortgage lender Housing Development Finance Corporation (HDFC) has authorized the raising of an additional Rs 57,000 crore through the issuance of non-convertible debentures before the merge with HDFC Bank (NCD). This will be done through multiple tranches, the company said in a release.

This is the second major fundraising announced by HDFC in the last two months. On February 26, HDFC raised Rs 25,000 crore through bonds at a 7.97 percent coupon rate. It was the country's largest-ever bond issue.

HDFC-HDFC Bank merger is set to take effect by June-July after receiving the necessary approvals from various regulatory authorities. The merger was announced in April last year. “Increase in the overall borrowing powers of the Corporation from Rs. 6.00 lakh crore to Rs. 6.50 lakh crore, outstanding at any point of time and recommended the same for approval of the Members of the Corporation by way of postal ballot,” the company said in the release.

Further, it said that the said decision was taken since the outstanding borrowings of the corporation as on date is approximately Rs 5.70 lakh crore and the Corporation would need to borrow further for its business purposes till the effective merger date. On March 17, the company said its board would consider raising funds through NCDs in tranches aggregating to Rs 57,000 crore.

In April last year, HDFC said its board has approved the merger of its wholly-owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited. As part of the plan, HDFC will acquire a 41 percent stake in HDFC Bank through the transformational merger. HDFC Vice Chairman and CEO Keki Mistry said the merger of HDFC and HDFC Bank, expected to take effect in June-July, will lead to bigger growth opportunities for the combined entity.