Informist, Tuesday, Sep 26, 2023

By Subhana Shaikh

MUMBAI – Yields on corporate bonds ended a volatile session on a largely flat note in the secondary market today as most investors awaited the government borrowing calendar for Oct-Mar, dealers said.

In the morning, yields had opened slightly higher due to some selling by mutual funds. However, towards the end of the session, yields fell, tracking a similar movement in government securities on market buzz that the government may cut its record borrowing target in the current financial year. 

Mainly mutual funds were said to have been selling corporate bonds owing to rising redemption pressure at the end of the September quarter, while banks and pension funds remained on the buying side, dealers said.

Papers issued by Vivriti Capital, Indian Railway Finance Corp, State Bank of India, Andhra Pradesh State Beverages Corp, Power Finance Corp, Indiabulls Housing Finance, Navi Finserv, Uttar Pradesh Power Corp and Kerala Financial Corp were traded the most across tenures today.

According to a ministry official, the finance ministry may release the government borrowing calendar for Oct-Mar after 1700 IST today. Officials from the Reserve Bank of India and the finance ministry are meeting to discuss the borrowing calendar today, official told Informist.

The government is scheduled to borrow 15.43 trln rupees in 2023-24 (Apr-Mar), with the second half set to draw an issuance of 6.55 trln rupees on a gross basis. Last year, the government had cut its borrowing target by 100 bln rupees to 14.21 trln rupees for 2022-23 at the announcement of the Oct-Mar borrowing calendar.

Overall, sentiment in the bond market remains positive owing to the inclusion of Indian government's bonds in JP Morgan's Global Bond Index.

"Generally, sentiment is positive. However, people want to time out their entry into going long in a more concentrated fashion," a fund manager at a mid-sized fund house said. 

In the primary market today, big-ticket issuer National Bank for Agriculture and Rural Development raised 10.41 bln rupees through its first social sector bond at a coupon of 7.63% as against 30 bln rupees that it had set out to borrow.

On Sep 5, Informist had exclusively reported that NABARD is set to tap the primary market with the first-ever social sector bond issuance this month. On Sep 15, NABARD Chairman Shaji K.V. told Informist that the bonds will be launched on Sep 29. 
 

Tata AIG General Insurance Co Ltd raised 5.45 bln rupees through bonds maturing in 10 years at a coupon of 8.15%. The issue was fully subscribed.

Punjab National Bank raised 30 bln rupees through Basel-III compliant tier-I bonds at a coupon of 8.59%, while Canara bank raised 50 bln rupees through 10-year infrastructure bonds at a coupon of 7.54%. Both issuances were fully subscribed.

This has come as several banks are looking to raise funds through infrastructure bonds. On Wednesday, ICICI Bank invited bids for its 10-year infrastructure bonds. The private sector bank plans to raise up to 40 bln rupees through this issue.

Last week, Informist had exclusively reported that ICICI Bank plans to raise up to 40 bln rupees through the issuance of infrastructure bonds.

Tata Power Co plans to raise up to 10 bln rupees through nine-year unsecured bonds and has called bids for the same on Wednesday.

Among non-banking financial services, Mas Financial Services, Neogrowth Credit Pvt Ltd, Chaitanya India Fin Credit Pvt Ltd, and Spandana Sphoorty Financial Ltd, among others, have also called bids for their respective offerings on Wednesday.

Today, deals aggregating 52.61 bln rupees were recorded on the National Stock Exchange and BSE combined, as against 60.34 bln rupees on Monday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 320 mln rupees were traded at a weighted average yield of 7.4507-7.4776%, according to data from the Reserve Bank of India's Negotiated Dealing System-Order Matching System.

* 120 mln rupees of Haryana's 2026 bonds were traded at 7.4507-7.4776%

* 100 mln rupees of Tamil Nadu's 2025 bonds were traded at 7.4550%

* 100 mln rupees of Punjab's 2026 bonds were traded at 7.4531%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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