Women's clothes are displayed on mannequins at a Big Bazaar hypermarket, operated by Future Retail Ltd., in Mumbai, India, on Sunday, April 16, 2017. Future Retail, India's biggest department store chain, still has room to extend the rally that's more than doubled its market value this year. A shortage of cash hit purchases of soaps to cars after Prime Minister Narendra Modi in November junked high-value currency bills, driving shoppers to large-format stores like Future Retail that accept credit cards. Photographer: Dhiraj Singh/Bloomberg
Text Size:

Mumbai: An Indian retailer is set to tap the rupee bond market to cut funding costs, in a test of whether the nation’s measures to bring a thaw in the domestic credit crisis have succeeded.

Future Retail Ltd. is seeking bids Friday to raise as much as Rs 200 crore ($27 million) via a three-year note, a person familiar with the matter said. The company, with an A- domestic rating, this week approved raising Rs 6,500 crore via bonds to replace its existing high-cost debt.

The Amazon.com Inc.-backed retailer joins other stressed Indian issuers looking to build cash buffers to withstand the coronavirus pandemic’s financial fallout. Policy makers have announced several steps to bring down borrowing costs, from sharp cuts in benchmark interest rates to a liquidity boost and additional credit lines in recent weeks.

Future’s liquidity has worsened due to the stringent measures taken to control the spread of the coronavirus in the country, Brickwork Ratings said in a note earlier this month. The company sought to reschedule repayments on its existing bonds, according to the rater.

Future Retail’s spokesman didn’t immediately respond to calls seeking comment.

The cost of three-year funding for A rated issuers has slumped to 7.65%, near the lowest in at least 15 years, according to Bloomberg-compiled data. Future Retail, by contrast, is offering 9.95% on the new bond.

The fund raising is crucial for the firm looking to refinance short-term dues of about 21 billion rupees in May and June, according to Care Ratings. Amazon holds an indirect stake of 1.3% in the retailer. – Bloomberg


Also read: India’s debt binge will widen overall 2020-21 fiscal deficit to 13%, HSBC says


 

Subscribe to our channels on YouTube & Telegram

News media is in a crisis & only you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.

At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.

Support Our Journalism

5 Comments Share Your Views

5 COMMENTS

  1. Those who have aspirations have thousands of things, and those who have no ambitions only feel that it is difficult

  2. Wonderful employer and retail king of India ।
    Love you my future .
    As an experienced ex employees of group, we learned and earned a lot .
    People centric company।

  3. Future group ek Chor company he Jo BHI paisa lagayega dhub Jayega chahe Woh Amazon ho Indian citizen who are investing to buy the shares

LEAVE A REPLY

Please enter your comment!
Please enter your name here