Jio Finance, a wholly owned subsidiary of Jio Financial Services, is set to launch its first bond issue next week, raising up to Rs 1,000 crore by selling bonds maturing in two years and ten months.
The issue is of Rs 500 crore and has a greenshoe option which allows it to raise up to another Rs 500 crore. The issuance of the bond will happen on 14 May with the Expected Coupon rate at 7.19%.
Reports on the matter also indicate that ICICI Securities Primary Dealership has been on its own as the booking running lead manager on the issue. Based on local rating agency CRISIL’s analysis, Jio Finance has been given rating of “AAA’.
It had intended to mobilise up to Rs 3,000 crore through the domestic market in March but deferred the issuance as yields offered were higher and it expected yields to come down in the near future as RBI was expected to announce a 25 bps cut in rates in April.
The company recently issued commercial papers worth Rs 1,000 crore at a 7.80% yield by making commercial papers with a three-month tenor available to the public, despite successfully avoiding its first bond issuance in the domestic capital market for a while.
In its April meeting, the RBI's six-member Monetary Policy Committee lowered the policy repo rate by 25 basis points to 6% and changed the monetary policy stance from "neutral" to "accommodative," which suggests further rate cuts in the future.
In addition, liquidity situation was constrained especially in March when banking system was in a deficit of liquidity. It was in the negative territory in last week of March due to many liquidity management strategies by Reserve Bank of India such as OMOs, dollar-rupee swaps etc.
In April, the yields for issuance in AAA rated state owned entities were below 7% due to declining yields on Government bonds especially the 10 year ones, which have an average rating of AAA, better liquidity situation and anticipated rate cuts in the next policy reviews by the RBI.
Due to favorable interest rates, April—typically a slow month for corporate bond issuances—saw nearly Rs 1 trillion in bonds issued. In FY25, domestic companies raised a record amount from the domestic capital market by issuing bonds, totaling around Rs 11 trillion. In FY24, corporates raised slightly more than Rs 10 trillion from the capital market.
