Navi Finserv has withdrawn a planned bond sale scheduled for bidding on Monday, the firm said, days after the country's financial regulator barred the non-bank finance company (NBFC) from issuing new loans.
The company was scheduled to raise 1 billion rupees (nearly $12 million) through two-year and three-month bonds, with a coupon of 10.40%, payable on a quarterly basis, 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 funding at this point, leading to this development," Shobhit Agarwal, head of lending at the NBFC told Reuters in a statement.
The company did not comment on the Reserve Bank of India's (RBI) action to bar the NBFC from sanctioning and disbursing loans in relation to the bond sale.
On Thursday, the RBI barred four NBFCs, including Navi Finserv, from sanctioning and disbursing loans due to "usurious" pricing and for charging a significant mark-up over their funding costs.
A spokesperson for Navi Finserv -- started by Sachin Bansal, founder of the Indian e-commerce giant Flipkart -- had said it was reviewing the circular and was committed to addressing all concerns raised "promptly and effectively".
"There is no sense in borrowing funds," with lending stalled, one of the bankers said. Bankers are also looking out for any rating downgrades on existing bonds issued by the firm, another banker added.
The bankers requested anonymity as they are not authorised to speak to the media.
The bonds of the NBFC, whose loan book stood at 80.37 billion rupees as of March end, are rated A by Crisil.