Shriram Finance Looking To Raise $500 Million Via Debt In January-March, Says MD — Profit Exclusive

Shriram Finance Ltd. plans to tap the offshore market in January-March to raise up to $500 million through debt, Managing Director YS Chakravarti told NDTV Profit.

"We have already raised more than $750 million and the idea is to raise at least $500 million through overseas market in this financial year," Chakravarti said.

This will be a two-part borrowing consisting of bonds and loans through development finance institutions, he said, adding that the finance team has already applied, seeking permission from the Reserve Bank of India.

Pricing of the bond issue is yet to be determined, as it will take place in January post the swearing in of Donald Trump as the 47th President of the United States on Jan. 20, as rates might change.

Markets are pricing in a roughly 97% chance that the Federal Open Market Committee will cut federal fund rates by 25 basis points in its last policy meet of 2024 on Wednesday, according to the CME FedWatch tool.

In September, the company had raised $500 million equivalent to about Rs 4,000 crore through the issuance of senior secured notes maturing in 2028 at a rate of 6.15%. This was under the $3.5-billion global medium term note programme.

Apart from Shriram Finance, there are several other non-banking financial companies such as Tata Capital Ltd., PNB Housing Finance Ltd. and REC Ltd. are said to have been lining up their bond issuances in the overseas market, merchant bankers said.

This has come as the RBI has been nudging non-bank lenders to reduce their dependence on bank borrowing and diversify their fundraising sources.

Till September-end, funding through banks remained 66% of NBFCS-microfinance institutions' mix, followed by 12.9% from securitisation, 11.9% from bonds, 9.10% from external commercial borrowings and the rest from commercial papers, India Ratings and Research said in a report.