NextFin News - Capri Global Capital is pivoting its financing strategy toward the public debt markets, marking a significant shift for the Indian non-banking financial company (NBFC) as it seeks to diversify away from traditional bank loans. The Mumbai-based lender announced on Thursday that it will launch its maiden public bond issue to raise 5 billion rupees ($54.05 million), the first step in a broader 20 billion-rupee fundraising campaign planned for the current fiscal year.
The debut issuance, scheduled to open for subscription on April 15, offers maturities ranging from two to ten years with annual coupon rates between 9.00% and 9.50%. Managing Director Rajesh Sharma, who has led the firm’s expansion into gold loans and affordable housing, stated that the company intends to rely more heavily on debt markets than bank credit this year. Sharma’s strategy reflects a growing trend among mid-sized Indian shadow banks to lock in long-term funding from retail and institutional investors rather than remaining tethered to the fluctuating terms of commercial bank lines.
This shift comes as the broader Indian corporate bond market shows signs of deepening. According to Reuters, Indian companies raised approximately 107 billion rupees through public debt issues in the previous financial year, a sharp increase from 81.5 billion rupees in fiscal 2025. Capri Global’s move to offer monthly interest payouts for three- and five-year tenors—yielding effective rates of 9.15% and 9.30%—is specifically designed to attract retail investors seeking regular income in a high-interest-rate environment.
While Sharma’s outlook is optimistic, the strategy carries inherent risks. The bonds are rated 'AA' by Acuite Ratings and Infomerics Valuation, a solid investment-grade tier but one that sits below the 'AAA' gold standard enjoyed by larger peers like HDFC or Bajaj Finance. This rating gap means Capri Global must offer higher yields to attract capital, potentially squeezing net interest margins if the cost of lending to its core customer base—primarily middle and lower-middle-income borrowers in tier 2 and 3 cities—cannot be adjusted upward.
Furthermore, the success of this pivot depends on market liquidity and investor appetite for NBFC paper, which has historically been sensitive to credit events in the shadow banking sector. While the company plans to use the proceeds for on-lending and servicing existing debt, any tightening of liquidity in the domestic market could make subsequent tranches of the 20 billion-rupee plan more expensive or difficult to execute. For now, Capri Global is betting that the public's hunger for yield will outweigh the structural advantages of bank-led financing.
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