dollar bond market India: Will NaBFID successfully navigate offshore bond market?

Mumbai: The National Bank for Financing Infrastructure and Development (NaBFID) held non-deal investor meetings in Hong Kong last week as part of preparations for its first offshore bond issue, people familiar with the matter said.

Citibank was coordinating the meetings, which aimed to gauge investor appetite ahead of a potential dollar bond sale, they said. The deal size, if pursued, will hinge on market conditions and the effective cost. A Citibank spokesperson declined to comment where NaBFID did not respond to request for comment. “The international rating process is currently underway, and the deal size will depend on market conditions and the landed cost in INR terms after hedging,” a person privy to the development said. Since, NaBFID is a first-time issuer, the bond when priced could be 100-120 basis points above the US treasury yield, the person added.

The last time an Indian public sector entity tapped the dollar bond market was in September 2024, when power sector financier REC raised $500 million at 4.75%. This was purely a non-deal roadshow, one person said. “NaBFID is testing waters and may not immediately raise funds.” NaBFID, fully owned by the Indian government, has an authorised capital of ₹1 lakh crore and paid-up equity of ₹20,000 crore. It benefits from a sovereign guarantee on foreign currency borrowings and has received a ₹5,000 crore grant to lower funding costs.