Jio Financial Services Holding Talks For Maiden Bond Issue To Raise Rs 5,000-10,000 Crore: Report

Jio Financial Services, the Indian conglomerate Reliance Industries-backed financial services firm is in initial negotiations with merchant bankers for its maiden bond issue, reported Reuters quoting four bankers.

The company can likely look to raise Rs 5000 crore ($600.6 million) to Rs 10,000 crore via the issue and may tap the market in the last quarter of this financial year, the bankers added.

Jio Financial is in the process of getting its credit rating and other necessary approvals, according to the report quoting sources.

The bankers said this on the condition of anonymity as they are not allowed to speak to the media, while Jio Financial did not immediately reply to Reuters' email for comment.

The company, which was listed in August, intends to establish itself as a full-service financial services firm in a rapidly growing market, including auto, home loans, and other products, competing with the likes of Bajaj Finance.

"Jio Financial has got a strong promoter parentage and it is expected that the company will automatically get an AAA credit rating," said Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap.

Earlier this month, Mukesh Ambani's Reliance Industries raised Rs 200 billion through the issuance of 10-year bonds, the largest issue by a non-financial Indian company, paying 40 basis points (bps) more than the government's borrowing cost.

Prior to the bond issue, bankers have recommended that Jio Financial issue shorter-term commercial papers and put bank borrowing lines in place to establish pricing said two bankers.

According to them, it has also been recommended to issue bonds not longer than five-year maturity.
"Since the company is new, the documentation and compliance will take time, and we could see them coming in before end of March" said a merchant banker with a private bank.