ICICI Bank is preparing to raise funds through its first dollar bond issuance in nearly nine years, as Indian lenders increasingly tap global markets under the Reserve Bank of India’s new hedging framework that reduces borrowing costs.
According to bankers familiar with the matter, the bank is expected to raise at least $500 million through a likely five-year bond issue. The issuance is part of a broader trend, with peers such as HDFC Bank and Axis Bank already utilising the RBI’s swap facility to access cheaper foreign currency funding.
However, the bond sale is unlikely to take place before the second half of August. ICICI Bank is currently awaiting its quarterly financial results and is also in the process of renewing its Global Medium Term Note programme, which is required before issuance can proceed. Bankers estimate that the entire process could take 45–60 days.
If completed, this would mark ICICI Bank’s first dollar bond issuance since December 2017, when it raised $500 million through 10-year bonds at a coupon of 3.80%.
The renewed interest in offshore borrowing has been supported by the RBI’s June decision to introduce a swap facility for eligible external commercial borrowings. Under this mechanism, hedging costs are fixed at 1.5% per annum, significantly lowering the cost of overseas fundraising.
HDFC Bank was the first to use the facility in June, followed by Axis Bank, which raised $800 million through a dual-tranche dollar bond issue. The policy shift is expected to encourage more Indian lenders to explore global debt markets.
