Jio Finance, the lending arm of Jio Financial Services, is stepping into the Indian capital market next week to raise up to ₹1,000 crore. The company plans to do this by offering bonds that anyone can invest in. If you choose to invest, you’ll earn interest and get your money back after 2 years and 10 months- that’s when the bonds will mature.
The bond issue by the wholly-owned subsidiary of Jio Financial Services has a base size of Rs 500 crore and a green-shoe option of Rs 500 crore. Bidding will take place on May 14. The company is anticipating a coupon rate of 7.19 per cent. The bonds will mature in two years and 10 months. CRISIL, a domestic rating agency, has rated Jio Finance as “AAA.”
Planned To Roll Out In March 2025, But..
Jio Finance had initially planned to launch its ₹3,000 crore bond issue in March but postponed it to the 2025 financial year due to high yield demands from investors. The company delayed the rollout in anticipation of more favourable interest rates following the RBI’s April policy review.
In another milestone, Jio Finance successfully raised ₹1,000 crore for the first time through short-term commercial papers. These papers, which mature in just three months, came with an interest rate of 7.80%, giving the company quick access to funds.
Key Features
- Non-convertible debentures (NCDs), which cannot be converted into shares
- The total bond issuance is up to ₹1,000 crore, with a base size of ₹500 crore
- Bonds will mature in 2 years and 10 months- Investors To get their money back after this period
- The bonds offer an interest rate (coupon rate) of 7.19% annually
- The bonds are rated AAA by CRISIL, which indicates a low default risk
Step-By-Step Guide
- Research: Start by researching different corporate bonds available in the market. Look at the issuing company’s financial health, bond ratings, yield, and maturity period
- Make sure to open a Demat account, as exchanges like BSE or NSE typically hold and trade corporate bonds in dematerialised form.
- Open an account: If you don’t have a Demat account, open one with a registered depository participant (DP)
Choose A broker: You’ll need a broker to buy corporate bonds. Many stock brokers also offer bond trading services. - Brokers: Zerodha, Angel One, ICICI Direct, HDFC Securities
Place an order: Once you’ve decided which bond to buy, place an order through your broker
Hold or trade: After purchasing, you can either hold the bond until maturity or trade it in the secondary market.
