Jio Credit, a wholly owned subsidiary of Jio Financial Services, raised Rs 1,000 crore through its first bond issuance, selling bonds maturing in two years and ten months at a cutoff yield of 7.19 percent.
The issue had a Rs 500 crore base price and a Rs 500 crore greenshoe option.
The issue received bids totaling Rs 1,500 crore, or three times the base issue. Given its short duration, the offering drew a lot of interest, particularly from mutual funds, though insurance companies also participated.
Furthermore, sources stated that the cutoff yield was 7-8 basis points lower than that of some of the top private sector non-banking financial companies (NBFCs) operating in the same segment.
According to reports, ICICI Securities Primary Dealership was the sole arranger for the issue.
"Due to the escalation in tensions between India and Pakistan, yields on government securities had risen, causing a corresponding increase in corporate bond yields. G-Sec yields have rallied since the ceasefire announcement, but corporate bond yields have not recovered as much. In this context, Jio Credit was able to secure a tight cutoff despite the fact that it was their first issue, which was largely due to the brand's strength. Typically, maiden issues have a 5-10 basis point higher cut-off than regular issuances," said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.
Jio Credit, formerly known as Jio Finance, was thinking about raising up to Rs 3,000 crore by going public in the domestic capital market in March. However, because corporate bond yields were rising and were predicted to decline in the upcoming months, the company decided to postpone the issuance.
By selling commercial papers with a three-month tenure, the company raised Rs 1,000 crore at a 7.80% yield in March, marking the completion of its first commercial paper issuance.
