Jio Finance taps debt market with debut CP issue before bond sale

India's Jio Finance, a wholly-owned unit of Jio Financial Services, has tapped the debt market with its maiden commercial paper (CP) issuance, ahead of its debut bond sale later this month, three merchant bankers said on Thursday.

The non-banking finance company has issued three-month CPs at a yield of 7.80 per cent and accepted bids worth ₹1,000 crore ($114.95 million), the bankers, who have direct knowledge of the matter, told Reuters.

All of them requested anonymity as they are not authorised to speak to the media.

"As expected, Jio Finance has started its funding with a shorter-tenor CP issuance, and we are expecting its bond issue in the next 15 days before the close of the financial year (by March-end)," one of the bankers said.

 

Jio Finance could raise around ₹3,000 crore through the sale of five-year bonds and has floated an offer for a coupon of 7.75 per cent, according to the bankers.

"The company will speak to some investors and once it gets sufficient commitments, it will launch the issue," one of them added.

Jio Finance did not immediately reply to a Reuters email for comment.

The firm's bonds are rated 'AAA', while the CPs are rated 'A1+' by Crisil and Care. Both the ratings are of the highest grade for the respective instruments.

"The ratings factor in JFS (Jio Financial Services) group's healthy capital structure, robust liquidity including its holding of 6.1 per cent of RIL (Reliance Industries) shares, and its experienced management team," Crisil had said in a rating note.

Care said the ratings also take into account the company's strong capital buffers to scale up operations, its robust liquidity framework and the management's experience.