Mumbai: Samvardhana Motherson Automotive Systems Group, an auto parts maker raised $300 million through a dollar bond sale, two bankers associated with the process said.

The company belongs to the Samvardhana Motherson Group, of which the flagship company Motherson Sumi Systems Ltd is listed on Indian bourses.

The dollar bond sale, which was to be concluded later on Wednesday, this would be the first high-yield bond issuance from India after a gap of more than a year. The last high-yield bond issuance was by Reliance Communications in May 2015. The company raised $300 million through five-year bonds at a yield of 6.5%.

High yield bonds are those that have a lower rating than the sovereign rating of their residing country and therefore pay a higher yield to investors. Samvardhana’s issuer rating is BB+, or non-investment grade.

The bonds were priced at an aggressive 4.875%, one of the bankers cited above said. This was significantly lower than the initial guidance of 5.25% given by the arrangers. The response from investors was encouraging, the banker added.

The company will issue 5.5- year tenure bonds which are callable at the end of three years.

In a 2 June notice to bourses, the company had said that it has mandated ANZ Bank, Standard Chartered Bank, Barclays, HSBC, Deutsche Bank and DBS Bank to sell its bonds.

Overseas bond issuance from Indian companies has been tepid so far in 2016 with an aggregate mop-up of only $2.4 billion so far. In 2015, companies had raised more than $6 billion in the first six months of the year.

Emerging worries over China’s economic growth, the pace of the US Federal Reserve’s rate hikes and the impending vote on whether Britain would exit from the European Union (EU) have kept markets on edge. Emerging market issuers have been at the receiving end of this volatility.

Although India’s macroeconomic statistics have been more flattering than its emerging market (EM) peers, most investors have clubbed the country’s equity and debt within the overall EM basket. Inflows to domestic equity markets have slumped and the bond market has seen outflows so far.

“Issuances will begin to pick up once events like Brexit and the Fed policy are over," said the second banker.

US Federal Reserve chair Janet Yellen said on 6 June that the jobs data was disappointing and bears monitoring although she gave a largely upbeat outlook for the US economy. Her comments triggered expectations that the Fed would go slow on rate hikes. The Fed is scheduled to meet on 14 June to decide on rates.