Capri Global taps dollar market with debut debt issue after banks hit pause

MUMBAI: India’s Capri Global Capital has initiated the procedure to borrow in dollars in what would be its first ever foreign currency debt issuance, two months after it appointed lead managers, two merchant bankers said on Tuesday.

The non-banking financial company will aim to raise around $300 million to $500 million through 3-year-and-3-month bonds and has provided an initial price guidance of around 7.75%, the bankers added, requesting anonymity as they are not authorized to speak to media.

Capri Global Capital did not reply to a Reuters email seeking comment.

“Since the rush from banks to raise dollars seems to be largely over, other firms could tap the market, especially the ones who have completed the initial work,” one of the bankers said.

In June, the company had appointed bankers and conducted investor calls, but did not go ahead with the issue as pricing was less favourable than it expected, with investors eyeing large debt supply from better-rated Indian lenders.

Fitch Ratings has assigned the proposed dollar-denominated senior secured bonds an expected rating of ‘BB-(EXP)’. They will be issued as part of Capri Global’s global medium-term note programme that has an upper limit of $1 billion.

Earlier this financial year, Managing Director Rajesh Sharma had said the company will look to increase the share of capital market borrowings on its books.

Banks’ $12 billion pot

The issuance comes after Indian lenders raised an aggregate $12.15 billion through sale of dollar bonds in June-August under the Reserve Bank of India’s discounted swap window.

ICICI Bank is the latest to tap this route, raising $500 million through private placement at a coupon of 5.3080%, according to a stock exchange notice.

The private-sector bank leads the fundraising chart with an aggregate of $3.55 billion raised through a combination of private placement and public issue, with a near equal division.

Private lenders dominated the fundraising cycle, accounting for $9.15 billion or more than 75% of funds raised in this period.