Big-Ticket Bond Deal: LIC Subscribes to Rs 5,000 Crore Bajaj Finance NCDs

MUMBAI — Life Insurance Corporation of India (LIC) has officially subscribed to 500,000 secured non-convertible debentures (NCDs) of Bajaj Finance Limited, committing Rs 5,000 crore to a major fixed-income placement.

LIC Commits Rs 5,000 Crore to Bajaj Finance Debenture Issue

MUMBAI — In a landmark institutional debt transaction, state-backed institutional investor Life Insurance Corporation of India (LIC) has subscribed to 500,000 secured non-convertible debentures (NCDs) issued by Bajaj Finance Limited, aggregating to a total investment value of Rs 5,000 crore. The private placement transaction, finalized by Bajaj Finance’s Debenture Allotment Committee, features a 10-year tenure carrying an annual coupon rate of 8.15%.

The capital deployment highlights the ongoing synergy between India's largest life insurer and premier non-banking financial companies (NBFCs). By securing long-term institutional capital, Bajaj Finance aims to fortify its structural liquidity reserves, while LIC channels policyholder funds into high-grade, asset-backed corporate debt instruments designed to yield stable, long-term fixed income returns.

Financial Structuring and Security Parameters

Tenor, Yield, and Asset Cover

According to official exchange filings and corporate disclosures submitted to the BSE India Disclosures portal, the newly allotted NCDs are structured with a maturity period of 3,653 days, setting the final redemption date for August 27, 2036. The instruments are backed by a robust asset cover framework, maintaining a 1.10 times cover on book debts and loan receivables for original investors, supported by a first pari-passu charge.

Impact on Market Liquidity and Investor Confidence

Financial analysts note that large-scale debt subscriptions by institutional heavyweights like LIC provide a strong vote of confidence in India's leading retail and corporate lenders. For consumers and credit markets, steady liquidity flows into top-tier NBFCs translate to stable lending rates and continued credit expansion across consumer durable, SME, and housing finance segments.

Official Regulatory Disclosures

All operational metrics, coupon structures, and compliance notifications are drawn directly from formal corporate filings submitted by Bajaj Finance Limited and Life Insurance Corporation of India (LIC) via the National Stock Exchange of India.

"According to officials, the private placement of secured non-convertible debentures successfully meets the company's long-term resource mobilization objectives while aligning with institutional fixed-income mandates."

Why It Matters

For fixed-income investors and institutional portfolios, allocations of this scale illustrate active capital deployment into secure, long-duration corporate assets. For the broader financial ecosystem, strong participation by state-backed institutions reinforces stability and liquidity within India's corporate debt market.

Key Facts at a Glance

• Investor: Life Insurance Corporation of India (LIC).

• Issuer: Bajaj Finance Limited.

• Instrument: Secured Non-Convertible Debentures (NCDs).

• Total Value & Volume: Rs 5,000 crore across 500,000 units.

• Coupon & Tenure: 8.15% per annum, maturing on August 27, 2036.

Frequently Asked Questions

What is the total investment made by LIC in Bajaj Finance?

Life Insurance Corporation of India (LIC) invested Rs 5,000 crore by subscribing to 500,000 secured NCDs.

What are the tenure and interest rate of the NCDs?

The debentures carry a 10-year tenure (3,653 days) with an annual coupon rate of 8.15%, maturing in August 2036.

How is the debenture issue secured for investors?

The NCDs are backed by a first pari-passu charge on book debts and loan receivables, maintaining an asset cover of 1.10 times for original investors.

Source: Bajaj Finance Corporate Disclosures, Life Insurance Corporation of India (LIC), BSE India Disclosures, National Stock Exchange of India