Jio Financial Services, the newest Reliance Industries, is reportedly in the early stages of discussions with merchant bankers for its inaugural bond issuance

What Happened: The company is contemplating raising funds ranging from ₹5,000 crore to ₹10,000 crore through this bond issue and is considering tapping into the market in the last quarter of the current financial year, sources told Reuters.

Jio Financial, a recent addition to the financial landscape after being carved out of Reliance Industries, is actively working on securing its credit rating and obtaining the necessary approvals for the proposed bond issuance, the bankers stated.

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Why It Matters: Having debuted on the stock market in August, Jio Financial aims to position itself as a comprehensive financial services firm in a rapidly expanding market, offering services such as auto and home loans. This strategic move puts it in direct competition with established players like Bajaj Finance.

Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap, expressed confidence in Jio Financial’s creditworthiness, saying it has got a strong promoter parentage and is likely to automatically get AAA credit rating.

He added that pricing would depend on factors like tenure and the company’s balance sheet size at the time of the issue. As an non-banking financial company, Jio Financial’s pricing is anticipated to be 10-20 basis points higher than Reliance Industries.

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