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Informist, Friday, Aug 23, 2024

By Vaishali Tyagi

MUMBAI – Corporate bond yields ended the week on a steady note as traders avoided the secondary market ahead of next week which is packed with heavy issuances in the primary market, dealers said.

"Next week seems to be sort of eventful with issuances from different PSUs (public sector undertakings)," a dealer at a mid-sized brokerage firm said.

Issuances by multiple state-owned companies are in the pipeline for next week, starting with Bank of Baroda's infrastructure bond on Monday. Dealers expect the upcoming public sector bond offerings to draw investor interest, given their high ratings. Apart from state-owned entities, a few private sector companies are also lined up to borrow from the market next week.

Bank of Baroda has invited bids on Monday to raise up to 50 bln rupees through infrastructure bonds maturing in 10 years, and Canara Bank will tap the market on Tuesday to raise 30 bln rupees through Basel-III compliant tier-I bonds. Hindustan Petroleum Corp has invited bids to raise up to 25 bln rupees through bonds maturing in five years on Tuesday. On Wednesday, Indian Railway Finance Corp plans to tap the market to raise up to 30 bln rupees through bonds maturing in 10 years.

Aadhar Housing Finance has also invited bids on Monday to raise 3.5 bln rupees through bonds maturing on Dec 2, 2027. Aditya Birla Finance, Piramal Enterprises, Adani Energy Solutions, Arka Fincap, and Shrem Infra Invest are also in line to raise funds through bond offerings on Monday.

Today, REC raised 48.20 bln rupees through two bonds of different maturities. Axis Finance raised 1.35 bln rupees through the reissuance of bonds maturing on May 22, 2029, at a yield of 8.04%.

With investors spoilt for choice between multiple big-ticket issuances next week, it will be interesting to see how the issuers manage to achieve the desired pricing, merchant bankers said.

In the secondary market, a handful of mutual fund houses were said to be on the selling side while a few banks bought, dealers said. "We did not see much participants in the market today, a few banks and mutual fund houses were active and majorly in short-term paper."

Today, overall deals aggregating to 101.61 bln rupees were recorded on the National Stock Exchange and BSE combined, against 119.06 bln rupees on Thursday. "See, there is no change in the (secondary) market and supply is also steady. Whatever demand is there, supply is meeting that and, vice versa also, it stands true," a dealer at a mid-sized brokerage firm said.

Papers issued by National Bank for Agriculture and Rural Development, REC, Power Finance Corp, HDFC Bank, Indian Railway Finance Corp, Uttar Pradesh Power Corp, Hella Infra Market, Indiabulls Housing Finance, Muthoot Finance, Navi Finserv, Edelweiss Financial Services, and Spandana Sphoorty Financial were traded the most on the exchanges.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 166 mln rupees were traded at a weighted average yield of 7.0531-7.2546%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* 100 mln rupees of Haryana's June 2026 bonds were traded at 7.0531%

* 66 mln rupees of Uttar Pradesh's March 2026, June 2030, and June 2031 bonds were traded at 7.0549-7.2546%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

With inputs from Ashna Mariam George

Edited by Ashish Shirke

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