(Bloomberg) -- Indiabulls Housing Finance Ltd. is in talks with banks to raise between $300 million and $400 million via bonds, while Manappuram Finance Ltd. is mulling the sale of about $300 million of notes, according to people familiar with the matter.
The deals by the two Indian shadow lenders are expected in the coming months, said the people, who declined to be identified because they weren't authorized to speak about it.
The proposed issuance takes place after the Reserve Bank of India asked banks to increase buffers for consumer loans to contain risky lending. The rule change has made it difficult for shadow lenders to raise bank loans, prompting them to seek alternatives in credit market.
Indiabulls Housing and Manappuram did not immediately respond to Bloomberg's e-mailed request for comment about the deals.
The terms of the deals have not yet been finalized and could still change. The board of both companies are set to meet to discuss fundraising plans in coming days, according to stock exchange filings.
Proceeds from the Indiabulls transaction could be used for refinancing debt and expanding lending, some of the people said. A sale would take place under the RBI's external commercial borrowing program.
Manapurram Finance has held a roadshow to gauge investor appetite for the new bond, which may have a tenor in the range of three or five years, some of the people said.
--With assistance from Preeti Singh.
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