Cholamandalam Investment and Finance Co. is raising 50 billion rupees ($518 million) through a floating-rate bond, marking the largest local currency debt sale by any Indian financier. The shadow lender, which competes with banks for corporate and retail loans, is tapping bond markets to fund its growing balance sheet.

Indian shadow lenders have increasingly turned to debt markets as banks tighten lending norms and deposit rates compress. Floating-rate bonds appeal to investors betting on rate hikes, making this structure attractive amid rising policy uncertainty from the Reserve Bank of India.

The $518 million deal size signals strong demand for Cholamandalam's paper and reflects confidence in its ability to manage funding costs in a volatile rate environment. For investors, the transaction offers a rare opportunity to gain floating-rate exposure through a major non-bank lender.