(Bloomberg) -- Cholamandalam Investment and Finance Co. will raise 20 billion rupees ($239 million) selling subordinated bonds, making the issuance India’s largest such offering by a private shadow lender.
One of the nation’s top non-bank financier will issue notes due in seven years at a coupon of 9.10%, according to people familiar with the matter. Axis Bank Ltd. is the sole arranger to the sale, they said, asking not to be identified. The issuance garnered 34.8 billion rupees of bids, nearly two times the size on Tuesday.
Cholamandalam’s peers have been raising funds selling bonds that carry more risk for investors to fund the double-digit credit growth fueled by the robust expansion in India’s economy. Aditya Birla Housing Finance Ltd. on Tuesday sold 1.50 billion rupees of subdebt, while Sundaram Finance Ltd. raised 3 billion rupees earlier this month.
Cholamandalam’s loans grew 22% in quarter ended June from a year ago, and its profit jumped 30% to 9.4 billion rupees for the period.
Subordinate debt ranks below other, more senior loans with respect to claims on assets in the event of liquidation of the borrower.
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