NaBFID, HUDCO, SIDBI, PFC to raise ₹17,500cr via bonds
Some of India's big government-backed lenders—NaBFID, HUDCO, SIDBI, and PFC—plan to raise ₹17,500 crore (about $1.93 billion) by selling bonds this week.
The timing reflects expectations that borrowing costs will rise closer to the fiscal year-end, and firms are accessing the market despite high rates.
Different types of bonds for each firm
Each firm went for a different type of bond: NaBFID plans to issue 10-year bonds, SIDBI plans to issue notes with maturities of up to five years, HUDCO plans to issue perpetual bonds with a 10-year call option, and PFC is planning up to five-year notes after its REC merger proposal.
Even though interest rates are high right now, they decided it was worth going ahead.
Who are these firms and what do they do?
These organizations are state-run firms—they help fund India's infrastructure, housing projects, small businesses, and the power sector.
By planning to raise this money now (even at higher rates), they are accessing the market despite high borrowing costs.
What does this mean?
All this happened while market yields are rising fast: state government securities hit a 7.63% cut-off yield (the highest since earlier this month), and 10-year government bond yields are nearing 6.8%.
The RBI hasn't changed its main rate—it's still at 5.25%—but clearly borrowing money is getting more expensive across the board.