Jio Finance Limited may delay the plan to issue its first bond of Rs 3,000 crore, which was originally coming to the end of this month. It is a full -fledged subsidiary of Mukesh Ambani’s geo financial services.
Sources said that in view of the expectation of a decrease in the yield in April, the decision has come as it is widely expected that the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) can deduct 25 basis points in the policy repo rate. The company intended to raise money by selling 5 years of bonds.
Sources said, ‘There are only very few days left in the financial year (FY 2025). After the rate reduction, the cash situation will improve and this will weaken the yield, which has recently increased. ‘ He said, “He has released CP recently and he can wait till April to release his bonds.” Another source said, “The company can see the market status before entering the market.”
Crisil and Care have rated AAA of firm’s bonds and A Plus of CP. In this connection, Geo Financial Services did not respond to the e-mail sent by business sandandard.
The company issued a commercial paper (CP) last week and searched the possibility in the date market and raised Rs 1,000 crore on the 7.80 percent yield. The yield of AAA -rated corporate bonds has increased by 15 basis points since February. Because of this, all the issuers have accepted only partial subscriptions and have been forced to come back to the market with follow-on issues to meet their funding targets.
Due to the increase in yield of long -term bonds, most government issuers are raising funds from the market through Madhyam and short -term bonds, so that their money needs can be fulfilled despite more yields. This is their normal priority to long -term loans, as their yield has increased due to more such bonds being released. The issuers were motivated to issue short -term bonds due to the Reserve Bank’s expectation of continuous policy rate cuts in April and June.
The market stakeholders said that after the policy rate cuts, the long -term bonds will be cheaper at the long run in the long -term yield. Despite the reduction of policy rates in February, the yield of corporate bonds has increased due to high bonds, including the state government securities. According to the latest data of the Reserve Bank, the net reduction of cash in the banking system on Tuesday was Rs 2.26 lakh crore.
First Published – March 20, 2025 | 10:56 PM IST