India Corporate Bonds
Yields flat; primary market activity in focus
This story was originally published at 20:54 IST on 29 July 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds ended flat in the secondary market today, as market participants mostly remained on the sidelines due to lack of significant triggers, dealers said. Instead, investors focused on the primary market issuances that were lined up today, they said.
Today, the primary market saw bond deals worth over 61 bln rupees. Non-banking finance companies and housing finance corporations heavily tapped the fixed-income market to raise funds. The Indian Railway Finance Corp raised 29.60 bln rupees through the reissuance of its Jul 31, 2029 bond at a coupon of 7.37%, while Aditya Birla Housing Finance raised 15 bln rupees through 10-year paper at a coupon of 8.30%.
Tata Capital raised 9 bln rupees through bonds of different maturities. LIC Housing Finance raised 7.51 bln rupees through the reissuance of its 7.68%, May 29, 2034 bonds at a coupon of 7.62%.
"Yields were more or less steady, they are likely to remain steady unless something out of the box comes to hit the market, while traders are expecting this momentum to continue for some time," a dealer at a mid-sized brokerage firm said. "On primary market side, issuances are coming up, and demand is also there."
On Tuesday, Cholamandalam Investment and Finance Co invited bids to raise up to 20 bln rupees through bonds maturing in seven years. India Infrastructure Finance Co will seek bids for bonds maturing in 15 years to raise up to 14.75 bln rupees. Aditya Birla Finance will also tap the market by raising 10 bln rupees through two different bonds.
In the secondary market, only a few mutual fund houses and banks were active due to routine churn of portfolios, dealers said. Today, overall deals worth 100.59 bln rupees were recorded, compared with 110.87 bln rupees on the National Stock Exchange and BSE combined on Friday.
Papers issued by HDFC Bank, Hella Infra Market, Andhra Pradesh State Beverages Corp, Cholamandalam Investment and Finance Co, Power Finance Corp, National Bank for Agriculture and Rural Development, Navi Finserv, Uttar Pradesh Power Corporation, Small Industries Development Bank of India, Spandana Sphoorty Financial, Kerala Infrastructure Investment Fund Board, and Satin Creditcare Network were traded the most on exchanges today.
Market participants believe the secondary market is expected to remain sluggish until a major event happens. "There's currently no driving force or news in the secondary market," a dealer at a mid-sized brokerage said. "People are waiting for the next event in the market, which could be anything."
UDAY BONDS
In the secondary market, 1.80 mln rupees of Tamil Nadu's Ujwal DISCOM Assurance Yojana bonds, maturing in March 2026, were traded at a weighted average yield of 7.3489%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | FRIDAY |
Three-year | 7.59-7.61% | 7.59-7.61% |
Five-year | 7.52-7.54% | 7.53-7.55% |
10-year | 7.45-7.46% | 77.45-7.47% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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