Capri Global Capital has initiated a plan to raise up to $500 million through its first-ever dollar-denominated bond issuance. This move is part of the company's strategy to reduce reliance on domestic bank funding and diversify its debt profile. Investors will likely watch the final pricing and demand, given the company's sub-investment grade rating and the costs associated with managing foreign currency debt.
Capri Global Capital has begun the process of raising between $300 million and $500 million through its maiden foreign currency bond sale. This move marks the company’s first entry into the international debt market, signaling a shift in its strategy to fund operations.
The bonds, which are senior secured notes with a maturity of three years and three months, are being marketed with an initial price guidance of 7.75 percent. The issuance is part of a larger $1 billion Global Medium Term Note (GMTN) program. By tapping into international capital, the non-banking financial company (NBFC) aims to reduce its dependency on the Indian banking system, with a long-term goal to increase the share of capital market borrowings to between 40% and 50% of its total debt.
Fitch Ratings has assigned an expected rating of 'BB-(EXP)' to these proposed notes. This rating reflects the company's position as an NBFC with a growing portfolio but also highlights the risks associated with its credit profile compared to higher-rated peers. The company’s assets under management (AUM) stood at approximately ₹401.1 billion as of the first quarter of the 2027 fiscal year.
While this fundraising could lower reliance on domestic bank loans, it introduces new variables for the company to manage. A primary challenge is currency risk. Because the company earns revenue in Indian rupees but has borrowed in U.S. dollars, it must use financial tools to hedge against currency fluctuations. These hedging costs can impact overall profitability. Additionally, the company is operating with a debt-to-equity ratio of approximately 3.7x as of March 2026, which is common for expanding financial firms but requires careful balance sheet management.
Investors may monitor the final pricing of the bond issue and the level of investor interest, as this will determine the actual cost of borrowing. The company previously attempted to enter the dollar market in June but stepped back due to pricing that did not meet its expectations. The success of this current attempt depends on how well the company can navigate market conditions, currency hedging expenses, and the appetite for sub-investment grade Indian corporate debt.