Ahead of the Reserve Bank of India’s (RBI’s) monetary policy review in the first week of December, major public sector non-banking financial companies (NBFCs) — the National Bank for Agriculture and Rural Development (Nabard), Small Industries Development Bank of India (Sidbi), Power Finance Corporation (PFC), and Indian Railway Finance Corporation (IRFC) — plan to raise up to Rs 24,000 crore together through bond issuancesk.
Illustration: Dominic Xavier/Rediff
Majority of the issuances amounting to Rs 19,000 crore are scheduled.
Market participants said yields may have bottomed out, and may harden if the six-member monetary policy committee (MPC) of the RBI decided to maintain the policy repo rate unchanged in the December meeting.
While Nabard plans to raise up to Rs 7,000 crore through bonds maturing on February 23, 2029, Sidbi aims to raise up to Rs 6,000 crore via bonds maturing on January 10, 2029.
PFC plans to raise up to Rs 3,000 crore each through a 3-year 4-month bond maturing on April 13, 2029, and another 10-year bond issuance maturing on November 27, 2035.
On its part, IRFC plans a 10-year zero-coupon bond issue of Rs 1,000 crore, with a green shoe option of Rs 4,000 crore, maturing on December 1, 2035.
“The pre-policy week is turning active, with major issuers rushing to lock in funds ahead of the December monetary policy review, and in anticipation of strong provident fund flows in December and January.
“Nearly Rs 19,000 crore of supply from PFC, Sidbi and Nabard is scheduled for a single day, and a couple of large banks are expected to join the queue next week,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.
After a surge in corporate bond issuances in the first quarter activity slowed in the corporate bond market as borrowing costs climbed.
However, the market hopes for a rebound soon, with yields expected to have bottomed out, said dealers.
“Public sector NBFCs regularly tap the market, but they were absent from the market for some time because yields were high.
“But now there is no expectation of softening of yields, hence they are back in the market,” said a market participant.
Indian corporates had raised a record Rs 4.07 trillion through debt in the first four months of 2025-26 (FY26).
Banks have been largely absent from the domestic debt capital market since the start of FY26, dampening overall corporate bond market activity so far.
Meanwhile, following State Bank of India’s Rs 7,500 crore fundraise through Tier-II bonds at record levels, several state-owned banks are planning to tap the domestic debt capital market to raise funds via Tier-II issuances.
Although some banks have received board approvals for infra bonds, no issuances have been announced so far.
Banks had tapped the domestic debt capital market aggressively in FY25 through infrastructure bonds as deposit growth was running behind loan growth.
Since banks have been mostly inactive in the bond market this year, experts said total fundraising by Indian companies, including banks, may fall short of last year’s figure of close to Rs 11 trillion.
