India Corporate Bonds
10-yr ylds tad down; primary market in focus
This story was originally published at 21:36 IST on 2 August 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds maturing in 10-years fell marginally today on purchases by insurance companies, while those on three-year and five-year ended the week on a steady note, dealers said. Meanwhile, investors remained focused on the primary market issuances that were lined up today, dealers said.
"Insurance companies have shown some interest in purchasing 10-year bonds today, that's why a slight movement was there in longer-tenure paper. But, yields on shorter-term bonds have remained relatively the same due to limited activity in those tenures," a dealer at a mid-sized fund house said.
Today, the primary market saw bond deals worth over 34 bln rupees with non-banking finance and housing finance companies tapping the market to raise funds. SMFG India Credit raised 17 bln rupees through two bonds, while Summit Digitel Infrastructure raised 9.5 bln rupees through bonds maturing on Mar 15, 2030, at a fixed coupon of 7.87%.
India Infradebt tapped the market to raise 5 bln rupees through bonds maturing in 10 years, at a fixed coupon of 7.98%. Sundaram Home Finance raised 3 bln rupees through papers maturing on Sep 4, 2026.
Shriram Finance has invited bids to raise up to 30 bln rupees through two bonds on Monday. Rashtriya Chemicals and Fertilizers has sought bids for bonds maturing in three years to raise up to 3 bln rupees. Mahindra Rural Housing Finance will also tap the market to raise 2.25 bln rupees through bonds maturing on Aug 03, 2029.
In the secondary market, mainly mutual funds and banks were said to have been buying and selling short-term papers for their daily churn of portfolios, dealers said.
Trade volume was higher today at 112 bln rupees on the National Stock Exchange and BSE combined, against 57.78 bln rupees on Thursday.
Papers issued by HDFC Bank, Indian Railway Finance Corp, Hella Infra Market, Keertana Finserv, LIC Housing Finance, Cholamandalam Investment and Finance Co, Power Finance Corp, Punjab National Bank, National Bank for Agriculture and Rural Development, Bajaj Finance, and Navi Finserv were traded the most.
According to merchant bankers, yields are expected to remain stable in the near term. The primary market is likely to see some housing finance and non-banking financial companies tapping the market in coming weeks, especially after the Reserve Bank of India's monetary policy on Aug 8.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 14.00 mln rupees were traded at a weighted average yield of 7.1761-7.3695%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* 10.00 mln rupees of Tamil Nadu's February 2029 bonds were traded at 7.1761%
* 4.00 mln rupees of Haryana's March 2026 bonds were traded at 7.3695%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | THURSDAY |
Three-year | 7.59-7.60% | 7.60-7.61% |
Five-year | 7.52-7.53% | 7.53-7.54% |
10-year | 7.41-7.43% | 7.45-7.46% |
End
Edited by Saji George Titus
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