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Informist, Monday, Nov. 18, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds started the week on a steady note and remained largely unchanged as investors flocked to the primary market, where State Bank of India sought bids for its INR 100-billion infrastructure bond issue, dealers said.

SBI issued its third batch of 15-year infrastructure bonds at 7.23%. The state-owned bank raised the entire amount of INR 100 billion. Demand for the issue came largely from long-term investors such as insurance companies, Employees' Provident Fund Organisation, and pension funds, merchant bankers said. Other investors such as mutual funds also participated actively, according to an exchange filing by the bank.

SBI's 15-year infrastructure bonds garnered 85 bids worth INR 115 billion. Proceeds from the bond issue will be used to boost long-term funding for infrastructure projects and affordable housing initiatives. "SBI's infra bond, cut-off was slightly higher than what market participants had expected as everyone was expecting the coupon to be somewhere above 7.15-7.20%," a dealer at a mid-sized brokerage firm said. 

The primary market is expected to witness robust activity on Tuesday, with several issuances lined up. Godrej Industries plans to raise up to INR 10 billion through two bonds of different maturities and has invited bids for the same on Tuesday. GIC Housing has also invited bids to raise INR 6 billion through two bonds of different maturities. Sundaram Home Finance will also tap the market to raise INR 3.5 billion through December 2029 bonds. 

360 ONE Prime plans to raise up to INR 2.5 billion through bonds maturing on May 2027, and Muthoot Capital Services plans to raise up to INR 500 million through bonds maturing in November 2026.

By contrast, the secondary market activity was slightly subdued, with insurance companies and banks active on the selling side, while mutual funds were said to be active in both buying and selling bonds. Most of the activity took place in shorter tenure papers. "Investors mostly did need-based trade deals and not any significant activity was seen and were focused on SBI's issue," a dealer at a mid-sized brokerage firm said.    

In the secondary market of corporate bonds on Monday, deals worth INR 64.19 billion were recorded on the National Stock Exchange and BSE combined, against INR 91.49 billion on Thursday. 

Papers issued by REC, Indian Railway Finance Corp, ICICI Home Finance Company, Vedanta Semiconductors, LIC Housing Finance, National Bank For Agriculture And Rural Development, Small Industries Development Bank of India, and HDB Financial Services were traded the most on the exchanges. 
 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 109 million were traded at a weighted average yield of 6.6013-7.1176%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 100.00 million of Tamil Nadu's Feb. 22, 2025 bonds were traded at 6.6013%

* INR 9.00 million of Punjab's Mar. 30, 2026 bonds were traded at 7.1176%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Avishek Dutta

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