Navi Finserv withdrew a bond sale scheduled for bidding on Monday, the company said, days after the country’s financial regulator banned the non-banking financial company (NBFC) from issuing new loans.
The company planned to raise 1 billion rupees (nearly $12 million) through two-year and three-month bonds, with a coupon of 10.40 percent, payable quarterly, five merchant bankers said.
“Navi Finserv maintains a healthy liquidity position and after careful consideration, we determined that there was no immediate need for external financing at this time, which led to this development,” Shobhit Agarwal, head of lending, told Reuters in a statement. of the NBFC.
The company did not comment on the Reserve Bank of India ( driven ) action to restrain the NBFC from sanctioning and disbursing loans in connection with the sale of bonds.
On Thursday, the driven banned four NBFCs, including Navi Finserv, from sanctioning and disbursing loans due to “usurious” pricing and for charging a significant margin on their funding costs.
A spokesperson for Navi Finserv, founded by Sachin Bansal, founder of Indian e-commerce giant Flipkart, said it was reviewing the circular and was committed to addressing all concerns raised “promptly and effectively.”
“There is no point in borrowing money” as loans are stagnant, said one of the bankers. Bankers are also keeping an eye on any rating downgrade of existing bonds issued by the company, another banker added.
The bankers requested anonymity because they are not authorized to speak to the media.
The bonds of the NBFC, whose loan portfolio stood at Rs 80.37 billion at the end of March, are rated A by Crisil.
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