Indian non-bank lenders plan $1.6 billion in debt sales as yields decline, bankers say

MUMBAI: Five AAA-rated non bank finance companies (NBFCs) are planning to raise as much as 150 billion rupees ($1.6 billion) through sale of bonds maturing from two years to five years, three merchant bankers said on Friday.

A drop in Indian corporate debt yields, especially for shorter term funds, has prompted companies to go back to the market after a quiet April.

Below are some of the issues likely to hit the market soon, based on information from merchant bankers, who declined to be identified as they are not authorised to speak to the media.

Bajaj Finance aims to raise 90 billion rupees through two separate debt issuances, while Tata Capital plans to mobilise 17.70 billion rupees through a dual-tranche bond sale.

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Bajaj Housing Finance is targeting 15 billion rupees, and M&M Financial Services is looking to raise 10 billion rupees.

Poonawalla Fincorp accepted bids worth 10 billion rupees earlier on Friday.

None of the companies responded to Reuters’ requests for comment.

Yields on AAA-rated papers of up to five-year maturity have eased by around 15 basis points over last couple of days as oil prices have eased on hopes of a resolution to the Iran war.

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Bankers said firms are trying to front-load borrowings before volatility returns, particularly with geopolitical risks still unresolved.

Benefit of bond funding over bank loans like tenor flexibility, better liability matching, faster rate transmission makes it favourable, Priyashis Das, CEO at a bond trading platform Altifi said.