Jio Credit looks to raise Rs 1K cr in maiden bond issue next week

Company is expecting a coupon rate of 7.19%, sources said

Jio Credit, formerly known as Jio Finance, is stepping into the domestic capital market next week with its maiden bond issue. The subsidiary of Jio Financial Services plans to raise up to ₹1,000 crore by selling bonds maturing in 2 years and 10 months, sources said.

 

The issue includes a base size of ₹500 crore and a green shoe option of ₹500 crore. The bidding for the bond issuance would take place on May 14, sources said, adding that the company is anticipating a coupon rate of 7.19 per cent. 

 

ICICI Securities Primary Dealership is the sole arranger for the issue, sources said.

 

An email sent to Jio Financial Services did not elicit a response until going to press.

 

The yields on 10-year government securities have hovered around 6.35 per cent in May. However, 10-year yields shot up to 6.40 per cent on Thursday due to escalation in tension between India and Pakistan. 

 

In March, Jio Finance was considering entering the domestic capital market to raise up to ₹3,000 crore. However, the firm delayed the issuance as yields on corporate bonds were trending higher, and there was expectation of yields softening in the coming months, as the Reserve Bank of India (RBI) was expected to deliver a 25 basis points (bps) rate cut in April.

 

The company completed its maiden commercial paper issuance, raising ₹1,000 crore at a yield of 7.80 per cent by selling commercial papers with a tenure of three months.

 

In its April meeting, the RBI’s six-member monetary policy committee (MPC) cut the policy rate by 25 bps to 6 per cent, and changed the stance to “accommodative” from “neutral”, indicating further rate cuts.

 

The liquidity conditions were pretty tight in March as banking system liquidity was in deficit. It turned into a surplus in the last week of March because of RBI’s measures, including open market operations, dollar–rupee–buy– sell swaps, among other things. 

 

In April, yields on issuances by AAA-rated state-owned entities fell below the 7 per cent mark, driven by declining yields on 10-year government securities, improved liquidity conditions, and expectations of further rate cuts by the RBI

 

April saw close to ₹1 trillion worth of bonds being issued. In FY25, domestic companies raised a record amount – around ₹11 trillion – from the domestic capital market by issuing bonds. In FY24, corporates raised a little over ₹10 trillion from the capital market.

 

Jio Financial Services is a core investment company registered with the RBI. It operates its financial services business through consumer-facing entities, including Jio Finance, Jio Insurance Broking, Jio Payment Solutions, Jio Leasing Services, Jio Finance Platform and Service, and Jio Payments Bank.

 

Shares of Jio Financial Services closed 1.91 per cent lower on the BSE at ₹251.25.   

DOMESTIC CAPITAL MKT HEALTH

  - Close to ₹1 trn worth of bonds issued in April’25

  - Around ₹11 trn raised in FY25 by domestic firms, a record amount

  - Little over ₹10 trn raised in FY24 by corporates