Indian firms ready $3 billion of debt issues with eye on potential RBI rate hike

Business Recorder reported that Indian companies are moving quickly to fix their borrowing costs before the Reserve Bank of India, the central bank, possibly raises interest rates. About $3 billion of rupee-denominated bonds are lined up for issuance over the coming days, with large conglomerates, state-run firms, infrastructure trusts and non-bank lenders among the planned sellers. The total is at least 290 billion rupees ($3.02 billion), timed ahead of the RBI's October 7 monetary policy decision.

Reliance Industries, Vedanta, Delhi International Airport, Adani Airport Holdings and JSW Energy are seeking a combined 185 billion rupees, while Cube Highways Trust, Interise Trust and India Infradebt are targeting 60 billion rupees. Citibank's Akshay Naik said issuers expecting higher rates are locking them in now, and he expects strong investor demand for large, frequent and highly rated borrowers.

A large majority of market participants expect the RBI to raise rates, which would be its first increase since February 2023, and further liquidity-draining steps are also on the cards. Several foreign banks, including Citi and Deutsche Bank, have moved their rate-hike forecasts from December to October, while a bond platform founder said the banking system has ample liquidity to absorb the new supply.