Mumbai, Jio Credit, the non-banking financial subsidiary of Reliance Group, led by Mukesh Ambani, successfully raised Rs 1,000 crore through its inaugural bond issuance aimed at domestic investors on Wednesday. This fully-owned unit of Jio Financial Services secured the funds at a competitive coupon rate of 7.19 percent.
The bonds, which have a tenor of two years and ten months, were met with significant demand, being oversubscribed by three times. The initial base size was Rs 500 crore, and the total amount raised includes a greenshoe option that permitted additional subscriptions.
Notably, the coupon rate is up to 0.08 percent lower than those offered by other well-rated non-banking finance companies.
On Wednesday, shares of Jio Financial Services registered a marginal increase of 0.13 percent, closing at Rs 267.75 on the BSE, outperforming the benchmark which rose by 0.22 percent. The enthusiasm exhibited by investors for Jio Credit’s bonds signals a growing confidence in the financial stability of the Reliance Group, notably during a challenging economic period. Analysts attribute the successful bond issuance to the company’s strong credit profile and innovative business strategies designed to leverage the expanding digital landscape in India.
With the infusion of this capital, Jio Credit intends to augment its lending portfolio, concentrating on retail loans and small business financing, which are anticipated to experience substantial demand as the economic recovery unfolds. Industry experts posit that this strategy not only fortifies Jio Financial Services’ market position but also emphasizes its commitment to advancing financial inclusion.
The momentum generated by this bond issue is likely to facilitate future fundraising endeavors, attracting additional investors in search of stable yields within a low-interest-rate environment. Furthermore, the favorable market response underscores a positive outlook on non-banking financial companies (NBFCs), which are increasingly recognized as key contributors in the lending ecosystem.
As Jio Credit strategizes for forthcoming opportunities in sustainable financing, it aligns with the global shift towards environmentally responsible investments. This initiative has the potential to enhance its reputation while attracting socially conscious investors, thereby broadening its appeal in the competitive financial services landscape.
As Jio Financial Services continues to navigate evolving market dynamics, the upcoming quarters will be critical in evaluating the impact of this bond issuance on its overall growth trajectory, particularly in light of changing regulatory frameworks and economic conditions.
