Jio Financial Services (JFS), which was recently spun out of Reliance Industries Ltd (RIL), is considering its maiden bond issue with a plan to raise up to ₹10,000 crore, a report said on November 20.
RIL’s financial services arm is in talks with merchant bankers, and plans to launch the issue in the January-March quarter of the fiscal year 2023-24, the Reuters a report said, citing four bankers familiar with the development.
The company can aim for a raise ₹5,000 crore to ₹10,000 crore through the bond issue, the bankers reportedly added. JFS has not yet reacted to the report.
Livemint could not independently control the development.
Notably, JFS was listed on the stock markets in August. The company faces competition in the Indian financial sector from fast-growing firms such as Bajaj Finance.
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Currently, the company is in the process of obtaining a credit rating and other necessary approvals, the bankers who spoke with Reuters said Their identities have not been disclosed.
JFS should present shorter-term commercial papers before the bond issuance, two bankers told the news agency, adding that the company also needs to keep its bank loan lines in place.
“Since the company is new, the documentation and compliance will take time, and we could see them coming in by the end of March,” said a merchant banker with a private bank.
JFS has also been recommended to issue bonds with a maturity of no longer than five years, the bankers reportedly added.
Regarding the pending credit ratings, Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap, was quoted by Reuters that JFS would “automatically receive a AAA credit rating” due to “strong promoter parentage”.
“Although the price will depend on factors like tenor and balance sheet size of the company at the time of issue, being an NBFC, it will be 10-20 basis points higher than RIL.”
In the trading session on November 20, JFS shares settled at ₹215.60 apiece on the BSE, down 2.4 percent from the previous day’s close.
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Updated: 20 Nov 2023, 15:49 IST
(tagsTo Translate)Jio Financial Services