Jio Finance plans first local debt market foray amid tightening RBI rules

By Saikat Das 

Jio Finance Ltd., a shadow lender owned by Asia’s richest businessman Mukesh Ambani, is in talks with several lenders to make its first foray into the local currency debt market, according to people familiar with the matter.

 

The company is expected to tap the market — either through a loan or bond offering — as early as the January-March quarter, a typically busy season for credit growth in India. The money will be used to onlend to industry, said the people, who asked not be identified as the discussions are private. The size and terms of borrowing are still being finalized, they added.

 

The move comes as tighter rules by the Reserve Bank of India make it harder for shadow lenders to raise local currency bank loans. Tightening has also triggered a wave of offshore debt sales by Indian shadow lenders over the past year.

 

However, Jio will borrow from the local currency debt market first to leverage its top credit rating, the people said. Crisil Ratings graded its different debt facilities at AAA with a stable outlook, higher than most of India’s non-banking finance companies. 

 

Jio Finance did not immediately reply to Bloomberg’s email seeking comment. 

 

Jio Finance has a dedicated non-banking focus and offers an array of financial products such as mortgages, loans against property, life and health insurance and corporate lending. It is a subsidiary of Jio Financial Services Ltd. It aims to capitalize on India’s digital growth — in September it embedded the app JioFinance on a separate consumer app called MyJio.

 

Jio Finance could also raise commercial papers for short-term money, one of the people said.