SIDBI raises $593M in bonds as yield rally reopens India's debt market
What's the deal? Small Industries Development Bank of India (SIDBIDealroom has a profile for this one. Try Dealroom →) raised US$761.4M (≈$593 million) on Wednesday through five-year bonds at an 8.17% coupon, in a post-IPO debt issue. The sale drew bids of more than US$1.81B, but the lender accepted less than its US$81.5-crore target, rejecting offers priced above its desired yield.
Why now? The issue landed during a rally in India's government bond market. The 10-year benchmark yield fell to 7.18% on Wednesday from 7.48% on October 26 after crude oil prices corrected, reviving activity in the debt capital market as issuers rushed to capitalise.
Why it stands out: At roughly $593 million, the deal sits in the 92nd percentile among post-IPO debt rounds in Indian fintech over the trailing 48 months, based on a sample of 315 rounds.
What could go wrong? Funding costs remain high. SIDBI's 8.17% coupon trails NABARD's 8.27% five-year bond this week and REC's 8.30% late-October borrowing, but it exceeds the 8.05% SIDBI paid last month on a shorter, 38-month note. October's corporate bond issuance fell about 37% month on month amid higher yields and tight liquidity, and the recent rally may prove fragile.
The signal: Strong bidding points to firm investor appetite for highly rated public-sector debt. But the capped acceptance and still-elevated coupon show borrowing costs remain substantial — and that issuers are moving fast to exploit narrow windows of relief when they appear.
Read more: business-standard.com
Image credit: ILO in Asia and the Pacific
