Latest news with #debtfundraising
Reuters
21-07-2025
- Business
- Reuters
India's investment trusts to expand debt fundraising as yields drop, analysts say
MUMBAI, July 21 (Reuters) - Debt fundraising by India's asset-backed investment trusts is expected to keep rising after exceeding $2 billion in the first half of 2025, as falling interest rates continue to fuel strong investor demand, analysts said. The real estate investment trusts (REIT) and infrastructure investment trusts (InvIT) raised over 178 billion rupees ($2.07 billion) in January-June, compared with 56 billion rupees in the same period last year, according to data aggregator Prime Database. "Bonds offer a lower cost of capital compared to traditional bank financing, especially for highly rated trusts with stable, long-term cash flows," Arka Mookerjee, partner at JSA Advocates and Solicitors, which provides legal advice to corporates. "The predictable income profiles of REITs and InvITs make them well-suited to debt financing, attracting institutional investors seeking yield-bearing, asset-backed instruments." Corporate bond yields have tumbled over the last few months, as the central bank infused liquidity and slashed interest rates by 100 basis points, while banks have lagged in lowering their lending rates. Embassy Office Parks REIT, IndiGrid Infrastructure Trust, Cube Highways Trust and Nexus Select Trust are among the firms that have tapped the bond market. Embassy REIT is planning another bond issue, Reuters reported last week, while others are also in early talks. Bonds typically have fewer restrictions than bank loans, allowing REITs to use the fund across multiple properties within the portfolio, said Lata Pillai, India senior managing director and head of capital markets, JLL, a global real estate services firm. The trusts, which need to disburse at least 90% of net distributable cash flows to unit holders, say cheaper funding allows them to provide better returns. Bond fundraising provides clarity to these trusts on planning their finances, while top credit ratings attract marquee investors such as mutual funds and insurers. "The AAA-rated structure gives greater credibility, visibility and better pricing," said Krishnan Iyer, chief executive officer at NDR InvIT, adding they also offer resilience to market volatility. With infrastructure and real estate sectors gaining momentum, investors see REITs and InvITs as a compelling blend of fixed-income stability and long-term growth, said Suresh Darak, founder of Bondbazaar, an online bond trading platform. ($1 = 86.1700 Indian rupees)
Reuters
27-06-2025
- Business
- Reuters
State Bank of India likely to tap debt market by Aug via tier II issue, sources say
MUMBAI, June 27 (Reuters) - State Bank of India ( opens new tab is likely to kick off a debt fundraising cycle for state-run lenders in this fiscal year over the next couple of months, with a Basel III-compliant tier II bond issue, three sources familiar with the matter told Reuters on Friday. India's largest lender is looking to raise about 50 billion rupees ($584.59 million) through those bonds, with a 10-year or 15-year maturity in July or August, the sources said. SBI did not immediately respond to a Reuters request for comment. The sources declined to be named as they are not authorised to speak to the media. "The initial level talks have already started, but the duration would be finalised looking at the rates at the time of issuance and investors' interest," one of the sources said. The source further added, SBI could also explore a 15-year structure with a call option at the end of 10 years, like its previous issue. In September, the bank had raised 75 billion rupees through 15-year tier II bonds, which had a call option at the end of 10 years. In the previous financial year, SBI had raised 150 billion rupees through tier II bonds. SBI has not tapped the bond market in the first half of 2025 and shelved a plan to issue infrastructure bonds in March due to elevated yields. No other state-run lender has tapped the debt market in the first quarter of this financial year that started on April 1. ICICI Bank is the only lender to tap the bond market. It raised 10 billion rupees through 15-year tier II bonds earlier this week, with a call option at the end of 10 years at a 7.45% coupon. ($1 = 85.5300 Indian rupees)
