Capri Global Capital initiates process for debut $300 million to $500 million dollar bond issue

Non-banking financial company Capri Global Capital has initiated the procedure to borrow in dollars in what would be its first-ever foreign currency debt issuance, according to two merchant bankers. The development comes two months after the company initially appointed lead managers for the process.

The firm is aiming to raise approximately $300 million to $500 million through 3-year-and-3-month bonds and has provided an initial price guidance of around 7.75 per cent. Capri Global Capital did not reply to an email seeking comment on the matter.

Earlier in June, the company had appointed bankers and conducted investor calls. However, it did not proceed with the issue at that time as pricing was less favorable than expected, with investors eyeing large debt supply from better-rated Indian lenders.

Commenting on market conditions, one of the merchant bankers noted that since the rush from banks to raise dollars appears to be largely over, other firms can now tap the market, particularly those that have completed their initial groundwork.

Fitch Ratings has assigned the proposed dollar-denominated senior secured bonds an expected rating of 'BB-(EXP)'. These instruments will be issued as part of Capri Global's global medium-term note programme, which has an upper limit of $1 billion.

Earlier this financial year, Managing Director Rajesh Sharma stated that the company would look to increase the share of capital market borrowings on its books.

This issuance follows a period where Indian lenders raised an aggregate $12.15 billion through the sale of dollar bonds between June and August under the Reserve Bank of India's discounted swap window. Private lenders dominated this fundraising cycle, accounting for $9.15 billion—or more than 75 per cent of funds raised in this period. ICICI Bank is among the recent participants, having raised $500 million through private placement at a coupon of 5.3080 per cent, as per a stock exchange notice. Private-sector banks lead the fundraising chart with an aggregate of $3.55 billion raised through a combination of private placement and public issue.

"Capri Global Capital's decision to re-enter the dollar debt market reflects a strategic effort to diversify its borrowing mix toward capital markets, as outlined by its management earlier this year. With the heavy rush of bank fundraising tapering off, timing the issuance carefully becomes crucial to managing pricing and investor demand. Achieving a successful debut issuance will depend on how the market perceives the 'BB-(EXP)' rating against current yields and available supply." — Dr. Shishir Gupta, Founder & CEO, StartupLanes