The RBI may look to cut down its support for the Indian bond market. It may buy Rs 1.7 lakh crore ($24 billion) of debt in the next fiscal according to a Bloomberg News survey of traders and economists. The central bank bought a record Rs 3 lakh crore worth bonds this fiscal to inject liquidity in the cash-crunched banking system. A majority for the ruling party in the upcoming general elections is also likely to boost foreign inflows into the Indian debt market thereby reducing dependence on RBI’s bond-buying programme.
Mahindra & Mahindra Financial Services is looking to raise $500 million (Rs 3,536 crore) through a mix of offshore and dollar bonds. The bonds, with a maturity period of 3 years, will be used to grow the company’s domestic lending business. While the company has already raised $30 million, the balance amount would be raised soon. The interest rate will be priced 150-160 basis points above benchmark LIBOR. A dollar bond is a dollar-denominated bond for raising funds from US investors by foreign companies. The principal and coupon payments are made in US dollars.