Jio Financial Services aims to raise Rs. 10,000cr via bonds
Jio Financial Services (JFS), a subsidiary of Reliance Industries Ltd (RIL), is planning its first bond issuance, with the goal of raising between Rs. 5,000 crore and Rs. 10,000 crore. A Reuters report indicates that the company is currently in talks with merchant bankers and intends to launch the bond issue during the January-March quarter of fiscal year 2023-24. JFS, which went public in August, competes with fast-growing companies like Bajaj Finance in India's financial services industry.
Credit rating and necessary approvals underway
As JFS gears up for its bond issuance, the firm is working on obtaining credit ratings and other necessary approvals. The names of the four bankers involved in this development have not been revealed. Venkatakrishnan Srinivasan, founder and Managing Partner at Rockfort Fincap, said that JFS would "automatically get AAA credit rating" due to its "strong promoter parentage." The bond pricing will be influenced by factors such as tenor and balance sheet size at the time of issuance.
Recommendations for shorter-term commercial papers
Prior to initiating the bond issuance, two bankers suggested that JFS issue short-term commercial papers and maintain existing bank borrowing lines. They also advised that JFS should not issue bonds with a maturity period exceeding five years. A merchant banker from a private bank noted that because of the company's recent entry into the market, "the documentation and compliance will take time," and the bond issuance could be expected before March's end.
Shares settle at Rs. 215.60 apiece on BSE
On November 20, JFS shares closed at Rs. 215.60 each on the Bombay Stock Exchange (BSE), a 2.4% decrease from the previous day's closing price. JFS aspires to become a comprehensive financial services provider, venturing into areas such as auto and home loans. With its robust promoter parentage and potential AAA credit rating, the company is well-positioned to challenge established competitors like Bajaj Finance in India's rapidly expanding financial services sector.
