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• L&T Finance plans to raise INR 1,000 crore through two bond issuances, comprising a reissue of its June 2031 securities and a fresh three-year-and-three-month bond.
• The company has proposed a yield of 7.98% on the reissued bonds and a 7.85% coupon on the new debt.
• The fundraising reflects continued reliance on the domestic bond market by NBFCs to diversify funding sources and support lending operations.
• The proposed issues are expected to attract institutional investors amid sustained demand for high-quality corporate debt.
L&T Finance is set to tap the domestic bond market with a planned fundraising of INR 1,000 crore through a combination of a bond reissue and a fresh non-convertible debenture (NCD) offering. The non-banking financial company (NBFC) has invited bids from investors for both issuances as it seeks to strengthen its funding base through medium-term debt instruments.
The proposed fundraising consists of two separate issuances of INR 500 crore each. The first involves the reissue of the company's existing 7.7942% June 2031 bonds, which will be offered at a yield of 7.98%. The second is a fresh bond issue with a maturity of three years and three months, carrying a coupon rate of 7.85%.
By simultaneously offering a reissued security and a new bond, L&T Finance aims to cater to investors with varying maturity preferences while enhancing liquidity in its outstanding debt portfolio. Reissuance of existing bonds is a common strategy that increases the size of an outstanding series, making it more attractive to institutional investors through improved secondary market liquidity.
The proposed debt raising forms part of the broader funding strategy adopted by NBFCs, which increasingly rely on domestic capital markets alongside bank borrowings. Corporate bond issuances provide access to stable, medium- and long-term capital, helping lenders diversify their liabilities and efficiently finance the expansion of their loan portfolios.
The three-year-and-three-month tenor of the fresh issue is aligned with the funding requirements of retail-focused lending businesses, allowing better matching of borrowing maturities with underlying assets. Such asset-liability management is an important aspect of maintaining financial stability and ensuring adequate liquidity as loan books continue to grow.
The Indian corporate bond market has remained active in recent months, with several highly rated financial institutions accessing investors through multiple debt issuances. Strong demand from mutual funds, insurance companies, pension funds and banks has continued to support fundraising by investment-grade issuers, particularly in the financial services sector.
L&T Finance invited bids for both bond issues on July 6. The company did not immediately respond to requests for comment on the proposed fundraising. If successfully placed, the issuance will add to the steady pipeline of debt market transactions by leading financial institutions seeking cost-effective funding through domestic capital markets.
Source:- Reuters
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