Jio Credit received bids worth Rs 1,500 crore, triple the base issue
Jio Credit, a subsidiary of Jio Financial Services, has raised Rs 1,000 crore via maiden bond issue, including a base size of Rs 500 crore and a greenshoe option of Rs 500 crore. The sold bonds will mature in 2 years and 10 months at a cutoff yield of 7.19%, the Business Standard reported, citing sources.
The company received bids worth Rs 1,500 crore, triple the base issue. ICICI Securities Primary Dealership was the sole arranger for the issue. The issue reportedly attracted strong interest mainly from mutual funds due to the shorter maturity period. A few insurance firms also participated in the bidding process.
“Due to the escalation in tensions between India and Pakistan, yields on government securities had risen, leading to a corresponding spike in corporate bond yields. However, following the ceasefire announcement, G-Sec yields have rallied, while corporate bond yields have not seen a comparable recovery. In this context, Jio Credit managed to secure tight cutoff despite it being a maiden issue,” founder and managing partner of Rockfort Fincap LLP, Venkatakrishnan Srinivasan told Business Standard.
The cutoff yield was reportedly 7-8 basis points lower than that of some leading private sector non-banking financial companies (NBFCs) operating in the same category.
Earlier in March this year, Jio Credit was mulling to enter the domestic capital market to raise up to Rs 3,000 crore. But as returns on corporate bonds were trending higher, the company postponed its decision to issue.
Jio Credit, formerly known as Jio Finance, is a wholly owned subsidiary of Jio Financial Services, a core investment company of Reliance Industries. Offerings of Jio Credit include home loans, loans against property, loans against mutual funds and loan against shares. The wholly owned subsidiary is also into vendor financing, working capital loans and term loans among other things.