India's second-largest private lender HDFC Bank on Tuesday raised debt worth Rs 8,000 crore through private placement by issuing additional Tier-I (AT1) bonds through online bidding of securities on the National Stock Exchange.

This is likely to be the biggest offering of perpetual debt as the bank seeks to raise capital after the profitability has been slower than its trademark 25-30 percent growth rate over the last two decades.

The perpetual bonds, which have no maturity date, carry a coupon of 8.85 percent, the lowest pricing on such debt issued by any Indian lender in 2017, according to Bloomberg data.

India Ratings and Research has given the highest rating of AA+ to the AT 1 perpetual debt bond. A bond issuance is a cheaper source of capital than raising equity.

In April, HDFC Bank said it will raise up to Rs 50,000 crore by issuing debt instruments, Tier-II bonds and long term infrastructure bonds over the next 12 months, in order to augment its capital base to support a growing business and a swelling loan book.

The bank’s Board has approved the issue of securities under private placement basis, HDFC Bank had said in a notice to the stock exchanges.

HDFC Bank’s capital adequacy ratio at the end of March 2016, fell to 14.6 percent from 15.5 percent a year ago, with the Tier-I capital adequacy ratio falling 40 basis points to 12.8 percent from 13.2 percent.

With one of the lowest NPA (non-performing asset) levels, HDFC Bank’s asset quality in March 2017 has remained stable at 1.05 percent, up marginally from 0.94 percent a year ago.

This is also the biggest issue by any issuer both in the private and public company (across both exchanges) on the electronic debt bidding (EBP) platform, which was launched in July 2016.

In this month itself, under this platform, Power Finance Corporation raised Rs 1,180 crore, Punjab and Sind Bank raised Rs 1,000 crore and LIC Housing Finance raised Rs 500 crore. In the previous month, HDFC Ltd (Rs 2,300 crore), NABARD (Rs 2,000 crore and Tata Capital Financial Services (Rs 1,025 crore) were among the big issuers.

The SEBI guideline issued in April 2016 mandates Electronic Bidding Mechanism for all debt fund raising (via private placement route) above Rs 500 crore (cumulative amount in one financial year) for improving the efficiency and transparency of the price discovery mechanism and reduction of cost and time taken for issuance of debt on a private placement basis.

All issuances are directly accessible to the institutional investors apart from the arrangers and sub-arrangers to place their respective bids.