Indian Non-Bank Lenders Plan 100 Billion Rupee Bond Issuance

Non-bank financial companies in India are preparing to raise at least 100 billion rupees ($1.1 billion) through local-currency bond issuances starting as early as next week. Lenders are moving to lock in borrowing costs ahead of anticipated interest rate hikes driven by strong domestic economic growth, rising oil prices, and global inflation. The Reserve Bank of India held its benchmark rate at 5.25% in August but has signaled potential future increases.

State-run Power Finance Corp. is leading the activity, seeking bids for up to 50 billion rupees. Other major participants include Bajaj Housing Finance Ltd., which plans to raise up to 20 billion rupees, and Tata Capital, which intends to borrow at least 15 billion rupees. HDB Financial Services and Shriram Finance are also planning offerings of at least 10 billion and 5 billion rupees, respectively.

This surge in borrowing follows a 13% decline in rupee-denominated issuance so far this year. In addition to hedging against rate hikes, these firms are building liquidity to meet an expected increase in credit demand during the upcoming festive season.