PSU NBFCs plan to raise up to ₹24,000 crore through bonds next week

PSU NBFCs Nabard, Sidbi, PFC and IRFC will raise up to ₹24,000 crore next week as issuers rush to lock in funds ahead of the RBI's December policy review amid expectations of firming yields

Ahead of the Reserve Bank of India’s (RBI’s) monetary policy review in the first week of December, major financial companies — such as Nabard, Sidbi, PFC, and IRFC — plan to raise up to ₹24,000 crore together through bond issuances next week. Majority of the issuances amounting to ₹19,000 crore are scheduled on Tuesday.

 

Market participants said yields may have bottomed out, and may harden if the six-member Monetary Policy Committee (MPC) of the RBI decided to maintain the policy repo rate unchanged in the December meeting.

 

While Nabard (National Bank for Agriculture and Rural Development) plans to raise up to ₹7,000 crore through bonds maturing on February 23, 2029, Sidbi (Small Industries Development Bank of India) is about to raise up to ₹6,000 crore via bonds maturing on January 10, 2029. Similarly, PFC plans to raise up to ₹3,000 crore each through a 3-year 4-month bond maturing on April 13, 2029, and another 10-year bond issuance maturing on November 27, 2035.

 

On its part, IRFC (Indian Railway Finance Corporation) plans a 10-year zero-coupon bond issue of ₹1,000 crore on Thursday, with a green shoe option of ₹4,000 crore, maturing on December 1, 2035.

 

“The pre-policy week is turning active, with major issuers rushing to lock in funds ahead of the December monetary policy review, and in anticipation of strong provident fund (PF) flows in December and January. Nearly ₹19,000 crore of supply from PFC, Sidbi and Nabard is scheduled for a single day, and a couple of large banks are expected to join the queue next week,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.

 

After a surge in corporate bond issuances in the first quarter (Q1), activity slowed in the corporate bond market as borrowing costs climbed. However, the market hopes for a rebound soon, with yields expected to have bottomed out, said dealers.

 

“Public sector non-banking financial companies (NBFCs) regularly tap the market, but they were absent from the market for some time because yields were high. But now there is no expectation of softening of yields, hence they are back in the market,” said a market participant.

 

PFC and IRFC are public sector NBFCs.

 

Indian corporates had raised a record ₹4.07 trillion through debt in the first four months of 2025-26 (FY26).

 

Banks have been largely absent from the domestic debt capital market since the start of FY26, dampening overall corporate bond market activity so far.

 

Meanwhile, following State Bank of India’s (SBI’s) ₹7,500 crore fundraise through Tier-II bonds at record levels, several state-owned banks are now planning to tap the domestic debt capital market to raise funds via Tier-II issuances. This marks a shift from earlier in the year when such activity was largely absent, with only SBI and ICICI Bank accessing the market.

 

Although some banks, such as Bank of India and Bank of Maharashtra, have received board approvals for infra bonds, no issuances have been announced so far. Banks had tapped the domestic debt capital market aggressively in FY25 through infrastructure bonds as deposit growth was running behind loan growth.

 

Since banks have been mostly inactive in the bond market this year, experts said total fundraising by Indian companies, including banks, may fall short of last year’s figure of close to ₹11 trillion.