Jio Credit, formerly known as Jio Finance, raised Rs 1,000 crore through maiden bond issuances on May 14 at a coupon rate of 7.19 percent, people familiar with matter told Moneycontrol.
The bonds will mature in 2 years and 10 months (March 15, 2028).
The issuances of bonds got completed today and received more than three times bids than the base issue size of Rs 500 crore. The company accepted base issue and Rs 500 crore greenshoe during the bidding, source said.
“Coupon set on the maiden bond issue of the company was 7.19 percent, which was almost 7-8 basis points (bps) lower than the coupons on the bonds of other prime non-banking finance company raising funds from the market,” source added.
ICICI Securities Primary Dealership was the sole arrange for the issuance of bonds.
The source further said that the company decided to issue after the rate cuts by the Reserve Bank of India (RBI) to avail the lower rates from the market.
On April 9, the central bank reduced the key repo rate by 25 bps, the second such cut in a row taking a toll to 50 bps cut since February this year, on a benign inflation outlook and moderate growth. It also shifted its stance from ‘neutral’ to ‘accommodative’.
There is further expectation from the market participants that the RBI will cut another 50 bps repo rate this year. Also, easing inflation in April and staying below medium-term target of 4 percent of RBI, is paving way for another rate cut in upcoming monetary policy to aid growth.
Further reduction in the repo rate is expected to help the corporates and government (both state and central) to issue bonds at lower rates, leading to lower borrowing cost.
Prior to this maiden bond issue, Jio Credit raised Rs 1,000 crore through three-month maiden commercial papers issuance at a yield of 7.8 percent.
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