Capri Global Approves $1 Billion Global Note Program

Capri Global Capital has approved a $1 billion Global Medium Term Note (GMTN) program. This initiative will allow the company to issue foreign currency debt and tap into international markets under U.S. regulations, aiming to diversify its funding sources.

Key Details: The $1 Billion Program

The company's management committee has approved the creation of a Global Medium Term Note (GMTN) program, enabling it to raise up to $1 billion. These foreign currency debt securities will be issued under U.S. regulations and offered only to non-Indian investors. This move signals a strategy to access international capital pools.

Why This Matters: Accessing Global Funds

This plan shows Capri Global Capital's goal to diversify its funding away from domestic markets. Using international debt markets through a GMTN program offers flexibility and could lead to better financing terms, longer repayment periods, and access to a wider range of investors. It allows the company to tap global liquidity, improving its financial flexibility and supporting growth plans.

Capri Global's Background and Funding History

Capri Global Capital is a diversified non-banking financial company (NBFC) focused on MSME loans, housing finance, construction finance, and gold loans, with many branches across India. The company has previously raised funds through domestic channels like public issues and private placements of Non-Convertible Debentures (NCDs). Recently, it raised ₹2,000 crore via a Qualified Institutions Placement (QIP) in Q1 FY26. Other large Indian NBFCs, such as Indiabulls Housing Finance, and banks like IndusInd Bank, have also set up Medium Term Note (MTN) programs to access foreign capital markets. Global Medium-Term Note (GMTN) programs offer broader access, including to U.S. and Middle Eastern markets.

Key Changes: What This Means for Funding

• Diversified Funding: Access international debt capital, reducing reliance on domestic borrowing.
• Global Investor Access: Opens doors to a wider pool of international investors interested in Indian debt.
• Flexible Issuance: The GMTN program allows for issuing various debt instruments based on market needs.
• Currency Access: Enables raising funds in foreign currencies. This could potentially help manage risks or align with foreign asset exposures, if applicable.

Potential Risks to Monitor

• Currency Risk: Issuing debt in foreign currency exposes the company to exchange rate volatility, affecting repayment costs if the Indian Rupee falls.
• Interest Rate Risk: Global interest rate changes could impact borrowing costs under the GMTN program.
• Regulatory Changes: Shifts in international financial rules or India's External Commercial Borrowing (ECB) guidelines could affect the program.
• Past Share Trading Issues: SEBI previously fined 25 individuals ₹1.3 crore for manipulating Capri Global Capital Ltd's share price and volume between August 2019 and June 2020. While not involving company management, this highlights the need for ongoing market vigilance.

How Capri Global Compares to Peers

Several leading Indian financial firms have established international debt programs. Indiabulls Housing Finance, for example, set up a $1.5 billion medium-term note program. IndusInd Bank launched a $1 billion Medium Term Note program in March 2019. These actions show a trend among large NBFCs and banks to tap global markets for funding diversification and cost efficiency.

Current Financial Context

• The approved Global Medium Term Note (GMTN) program has a limit of up to $1 billion.
• Capri Global's consolidated Assets Under Management (AUM) were ₹24,753.80 crore as of Q1 FY26.

What to Watch Next

• Finalization of terms, conditions, and documentation for the $1 billion GMTN program.
• Details of the first issuance, including amount, tenor, and coupon rate.
• Specific jurisdictions and investor types targeted for issuances.
• Company updates on how funds raised through the GMTN program will be used.