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Informist, Wednesday, Aug 28, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds were broadly steady in the secondary market today as investors flocked to the primary market where State Bank of India and Indian Railway Finance Corp sought bids for their bond issuances, dealers said.

SBI raised the entire amount of 75 bln rupees from the issuance of Basel-III-compliant tier-II bond maturing in 15 years at a coupon of 7.42%. Merchant bankers said that demand for the issue largely came from long-term investors such as Employees' Provident Fund Organisation, insurance companies, and pension funds. Mutual funds and banks also bid for the state-owned bank's bonds.

According to a bid book accessed by Informist, SBI's bond issue attracted 70 bids for 88.95 bln rupees in the range of 7.25-7.50%. The bonds carry a call option after 10 years from the allotment date. The last time SBI tapped the bond market with tier-II bonds was in November, when it raised 100 bln rupees through 15-year papers at a coupon of 7.81%.

Merchant bankers said the IRFC bond issue also saw good demand. The state-owned company raised 29 bln rupees through bonds maturing in 10 years at a fixed coupon of 7.25%. "Today, market was mainly focused on public sector companies like SBI and IRFC, and they received good bidding," a dealer at a mid-sized brokerage firm said. "Mainly, there were long term investors active for both the issuances, for IRFC – 'LIC' was most active that's why it received good rate (coupon)."

Apart from state-owned entities, Bajaj Finance raised 12.90 bln rupees through reissuance of bond maturing on Jul 31, 2029 at a yield of 7.93%.

On Thursday, JSW Steel has invited bids to raise up to 22.50 bln rupees through two bonds of different maturities. Data Infrastructure Trust will also tap the market to raise up to 18.50 bln rupees through bonds maturing in 10 years. The bond carries a fixed coupon of 8.00%, payable quarterly.

Century Textiles and Industries, IIFL Samasta Finance, and Criss Financial are also in line to raise funds through bond offerings aggregating to 11.41 bln rupees.

In the secondary market, yields remained flat due to lack of domestic and global triggers. Mutual funds and banks were active on both the selling and buying sides, dealers said. "Banks and MFs were active at the shorter end of the curve, but it was largely requirement-based trading with no incremental activity," a dealer at a mid-sized brokerage firm said. Despite the presence of several active players, the market saw balanced supply and demand, which resulted in yields being unchanged.

Today, deals aggregating to 98.80 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 51.09 bln rupees on Tuesday.

Papers issued by National Bank for Agriculture and Rural Development, Power Finance Corp, REC, HDFC Bank, State Bank of India, LIC Housing Finance, Uttar Pradesh Power Corp, Navi Finserv, AYE Finance were traded the most on the exchanges.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 26.80 mln rupees were traded at a weighted average yield of 7.0192-7.2477%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* 26.80 mln rupees of Uttar Pradesh's March 2027 and March 2031 bonds were traded at 7.0192-7.2477%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

With inputs from Ashna Mariam George

Edited by Ashish Shirke

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