Jio Financial Services (JFS), the financial services arm of Reliance Industries Ltd (RIL), is reportedly considering its first-ever bond issue, aiming to raise up to ₹10,000 crore ($1.34 billion). The company is in talks with merchant bankers and plans to launch the bond issue in the January-March quarter of fiscal year 2023-24.
Although JFS has not officially responded to the report, four bankers with knowledge of the matter have confirmed the discussions. According to these bankers, JFS may target raising ₹5,000 crore to ₹10,000 crore through the bond issue.
Following its listing on the stock markets in August, JFS now faces competition from other rapidly growing firms in the Indian financial services sector, such as Bajaj Finance. To proceed with the bond issue, JFS is currently in the process of obtaining credit ratings and other necessary approvals.
Merchant bankers suggest that JFS should file shorter-term commercial papers before the bond issue and maintain its existing bank borrowing lines. Due to the company being new, the documentation and compliance processes may take some time, possibly finalizing before the end of March.
The bankers also recommend that JFS issue bonds with maturity periods of no longer than five years. While the pricing of the bonds will depend on various factors, the credit rating is expected to receive an AAA rating due to JFS’ strong promoter parentage.
In the trading session on November 20, JFS’ shares closed at ₹215.60 apiece on the BSE, reflecting a 2.4% decrease from the previous day’s close.
Q: What is Jio Financial Services (JFS)?
A: JFS is the financial services arm of Reliance Industries Ltd (RIL), an Indian conglomerate.
Q: How much does JFS plan to raise through its bond issue?
A: JFS aims to raise up to ₹10,000 crore ($1.34 billion) through its maiden bond issue.
Q: When does JFS plan to launch the bond issue?
A: The bond issue is planned to be launched in the January-March quarter of fiscal year 2023-24.
Q: What recommendation has been made regarding the maturity period of the bonds?
A: The bankers suggest that JFS should issue bonds with maturity periods of no longer than five years.
Q: What credit rating is JFS expected to receive?
A: JFS is expected to receive an AAA credit rating due to its strong promoter parentage.