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PNB Housing Finance is set to raise up to INR 5 billion through a five-year bond issue, according to market sources. The proposed fundraising includes a base issue size of INR 4 billion and a greenshoe option of INR 1 billion. The non-convertible debentures will carry an annual coupon rate of 8.35%, with investor commitments scheduled to be sought on June 5. The issue has received AAA ratings from Care Ratings and India Ratings, indicating the highest degree of creditworthiness. The proposed bond sale comes amid continued activity in India's corporate debt market, where highly rated financial institutions are tapping investors to secure long-term funding amid evolving interest rate conditions.
PNB Housing Finance is planning to raise up to INR 5 billion through the issuance of five-year bonds, according to bankers familiar with the transaction. The fundraising exercise includes a base issue size of INR 4 billion along with a greenshoe option of INR 1 billion, enabling the company to retain additional subscriptions if investor demand remains strong.
The housing finance company has proposed an annual coupon rate of 8.35% for the bonds and has invited commitment bids from investors on June 5. The debt securities are expected to provide the company with medium-term funding to support its lending operations and broader business requirements.
The proposed issue has been assigned the highest credit rating of AAA by Care Ratings and India Ratings, reflecting strong credit quality and a high degree of safety regarding timely servicing of financial obligations. High-rated issuers have continued to attract institutional investor interest in the domestic bond market, particularly as financial institutions seek to diversify funding sources beyond traditional borrowing channels.
PNB Housing Finance is among the major housing finance companies in India and regularly accesses capital markets to support loan growth and maintain liquidity. Bond issuances remain an important funding avenue for housing finance companies, enabling them to match long-term liabilities with housing loan assets.
The planned transaction forms part of ongoing activity in India's corporate bond market, where issuers have continued to explore debt fundraising opportunities despite changing interest rate expectations. Market participants have been closely monitoring borrowing costs as financial institutions evaluate funding strategies for the remainder of the financial year.
According to bankers, the bond issue is structured with a five-year maturity, offering investors a fixed annual return through the 8.35% coupon. The final amount raised will depend on subscription levels and the company's decision on whether to exercise the greenshoe option.
The proposed fundraising was reported alongside another upcoming debt market transaction by state-owned lender REC, which plans to raise up to INR 30 billion through bonds maturing in two years, eight months and 18 days. The coupon rate for REC's proposed issue is yet to be determined, with investor bidding scheduled for June 8.
PNB Housing Finance had not responded to a Reuters request for comment at the time of reporting. The bond sale is expected to be closely watched by debt market participants as investors assess demand for highly rated financial sector issuances in the current market environment.
Source - Reuters
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