Indian lenders set record with $8 billion in dollar bond sales

Indian lenders have achieved a milestone by selling an unprecedented $8 billion in dollar bonds this year, surpassing the previous record of $7.92 billion set in 2019, according to Bloomberg data. The record-setting sales were recorded on Thursday, driven by the central bank's recent concessional foreign-exchange swap facility, which has reduced hedging costs for overseas borrowings and bolstered domestic liquidity.

At least four major lenders, including State Bank of India, ICICI Bank Ltd., and Axis Bank Ltd., participated in the market in August, marking the busiest month for such bond issuances to date. The RBI's special window for foreign-currency deposits closed a month early due to unexpected market demand, though the deadline for the overseas borrowing facility remains unchanged.

Around two-thirds of the dollar borrowings by Indian firms this year have come from financial institutions, indicating a response to the central bank's initiatives to stimulate capital inflows following a sluggish market earlier in the year. Lenders are now accelerating their bond offerings, and the pipeline is expected to expand further, with private and public sector banks alike capitalizing on the buoyant global demand for Indian financial-sector credit.