Capri Global Capital Launches First Public Bonds

Capri Global Capital has launched its first public bond offering, aiming to raise ₹500 crore. The subscription period is set to open on April 15, 2026. This marks a key step for the non-banking financial company (NBFC) as it seeks investors beyond its typical banking and equity funding. The bonds have maturities from two to ten years, with annual coupon rates between 9.00% and 9.50%, including options for monthly interest payouts on shorter terms. This debut offering is part of Capri's larger plan to raise ₹2,000 crore through bonds, supporting its growth and capital diversification. Acuite Ratings and Infomerics Valuation have assigned an 'AA' rating, indicating high safety and credibility. This fundraising follows a ₹2,000 crore Qualified Institutional Placement (QIP) in June 2025, showing proactive capital management for expansion.

Sector Trends Show NBFCs Tapping Public Debt

Capri Global Capital's move into public bonds mirrors a wider trend in India's NBFC sector, where companies increasingly use corporate debt for asset growth. Total public debt issuances by Indian corporations reached about ₹10,700 crore in the fiscal year ending March 2026, up from ₹8,150 crore the previous year. Capri's offered yields, especially 9.50% for 10-year bonds, are competitive. As of December 2025, AAA-rated NBFC bonds yielded up to 7.40%, while high-yield bonds reached 14.10%. Capri's 'AA' rating helps it attract investors seeking fixed-income options. The company's financial performance shows strong revenue growth (₹3,250 crore in FY25) and a significant profit increase. However, its low interest coverage ratio could be a concern for future debt servicing. Capri's consolidated Assets Under Management (AUM) stood at ₹30,406.58 crore for the nine months ending December 2025. Meanwhile, banks face margin pressures from issues like the Middle East conflict, with Net Interest Margins (NIMs) expected to remain stable or decline. This makes diverse, cost-effective funding essential for NBFCs.

Bond Offering Risks and Analyst Concerns

Despite the 'AA' rating and attractive coupon rates, investors should note several risks with Capri Global Capital's bond offering. The company's low interest coverage ratio suggests it could struggle with rising interest expenses. While current yields are appealing, market expectations point to potential future rate hikes by the Reserve Bank of India (RBI) due to geopolitical risks and inflation. This could raise Capri's future borrowing costs. Capri's loan portfolio includes MSME and construction finance, segments more vulnerable to economic downturns and regulatory changes, raising concerns about asset quality. Competitors like Bajaj Finance hold stronger market positions and potentially broader funding access. An analyst report from ICICI Securities has a 'REDUCE' rating on the stock, with a target price well below current valuation, signaling skepticism about future stock performance. Fitch Ratings assigns a 'BB-' rating, indicating a range of risk assessments among agencies.

Capri's Funding Strategy and Future Growth

Capri Global Capital's bond issuance aims to strengthen its funding and support expansion plans. The company's diverse business, including housing, MSME, and gold loans, offers some resilience. However, its performance depends on managing credit risk and navigating current interest rate conditions. The success of this debut bond sale will boost its capital and mark its development as a debt issuer. As the NBFC sector grows, Capri's ability to secure varied, cost-effective funding will be crucial for its sustained growth in a complex economic climate.