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Informist, Friday, Nov. 29, 2024

 

By Ashna Mariam George and Sachi Pandey

 

MUMBAI – SBI Capital Markets regained its position as India's top corporate bond arranger in October, after losing it to Axis Bank a month ago. The comeback is mainly on the back of a major deal it solely arranged for State Bank of India. Last month, SBI Capital Markets arranged 11 deals worth INR 64.15 billion, including SBI's INR 50 billion Basel-III compliant additional tier-I bonds.

 

HDFC Bank climbed to second place in October, having arranged 11 deals totalling INR 51.71 billion. It solely handled six deals worth INR 36.11 billion for companies like Aditya Birla Finance, Kotak Mahindra Prime, LIC Housing Finance, ICICI Home Finance, and Jamnagar Utilities and Power. HDFC Bank was in the fourth place in September.

 

Trust Investment Advisors returned to the third spot after nine months, by arranging 19 deals worth INR 48.52 billion. Of these, six deals worth INR 12.25 billion were solely arranged for Avanse Financial Services, Pragnya South City Projects, Nexus Select Trust, and Ayyappa Developers.

 

Axis Bank, which was the top corporate bond arranger in Jul-Sept as well as in September, slipped to fourth place in October. It arranged 13 deals worth INR 47.50 billion, including INR 22.5 billion solely for Bajaj Finance, Cholamandalam Investment, and Mahindra and Mahindra Financial Services.

 

ICICI Bank fell to the fifth place in October from third in September. It arranged 14 deals worth INR 47.05 billion during the month. Four of these, worth INR 19.5 billion, were solely arranged for HDB Financial Services, Muthoot Finance, Sundaram Home Finance, and Sandur Manganese and Iron Ore.

 

The overall fundraising in October fell by over 36% from the previous month as major issuers opted to hold off issuances during the festival season. Issuances were slow also because of confusion over certain regulatory changes.

 

On Sept. 18, the Securities and Exchange Board of India issued amendments to corporate debt issuance regulations. The regulations were interpreted initially as requiring board approval for every individual bond issue, whether through private placement or public offer. This added complexity to the fundraising process. On Oct 10, SEBI clarified that the amendments did not mandate prior board approval for each term-sheet, but only required a review by the board. In the interim, the confusion prompted many companies to halt fundraising, which weighed on the overall volume of issuances.

 

Corporates, financial institutions, and state-owned entities raised INR 761 billion across 249 bond offerings last month, down from INR 1.19 trillion in September, according to data with National Securities Depository Ltd. and Informist. 

 

Issuance by public sector entities dropped by 26% to INR 229.22 billion in October from INR 308.42 billion in September.

National Bank for Agriculture and Rural Development was the largest public sector issuer in October, raising INR 70 billion, followed by Small Industries Development Bank of India, which raised INR 59.22 billion. Non-banking financial companies raised INR 168.51 billion in October, down from INR 187.98 billion in September.

 

Banks and housing finance companies mostly refrained from major issuances last month, with the notable exception of SBI. The country's largest lender tapped the bond market with its first perpetual bond offering for the current financial year. October also saw the first municipal bond of the financial year by Rajkot Municipal Corp., which raised INR 1 billion at a coupon of 7.90% through its staggered redemption bonds. 

 

Most of the bond arrangers jointly participated in big-ticket issuances of NBARD, Power Grid Corp. of India, REC, and SIDBI. Last month, over 55% of the bonds issued had shorter maturities, with most slated to mature by 2029. 

 

Following is a list of corporate bond arrangers in order of the quantum arranged in October:

ARRANGERS	ISSUES ARRANGED (SOLELY OR JOINTLY)	AMOUNT ARRANGED (IN BLN RUPEES)
SBI Capital Markets	11	64.15
HDFC Bank	11	51.71
Trust Investment Advisors	19	48.52
Axis Bank	13	47.5
ICICI Bank	14	47.05
ISEC-PD	14	22.78
AK Capital Services	15	20.52
YES Bank	6	17.3
Tipsons Financial Services	11	14.2
PNB Gilts	11	7.71
LKP Securities	4	1.55
Others		418.01*
TOTAL		761

 

End

 

Edited by Ashish Shirke

 

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