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India Corporate Bonds:Ylds steady; primary supply in focus next week

Informist, Thursday, Oct 14, 2021

 

By Subhana Shaikh

 

MUMBAI – After a fall in the three-year segment over the past few sessions, yields on corporate bonds ended on a steady note in the secondary market today, amid muted trade volumes as investors remained on the sidelines on account of a truncated week, dealers said.

 

Indian financial markets will be shut on Friday on account of Dussehra.

Today, some mutual funds were said to have been active in the secondary market. Market participants also kept to the sidelines as they are waiting for a fresh supply of primary issuances lined up for next week.

 

Today, papers issued by Piramal Capital & Housing Finance, THDC India, Reliance Capital, Food Corp of India, Bank of India, SJVN, REC, National Bank for Agriculture and Rural Development, Union Bank of India, UP Power Corp and LIC Housing Finance were traded the most across tenures. 

 

Sentiment though remained positive as the CPI inflation print for last month fell to a five-month low of 4.35%. Inflation fell for the fourth straight month in September, and was below the consensus estimate of 4.5% in a poll by Informist.

 

“Post-policy, people believed stiffness will stay because Reserve Bank of India made no changes and market had discounted on the account that reverse repo might hike, that reversed and so the short end rallied by about 5-10 basis points. CPI is reassuring that RBI will not go towards normalisation so aggressively,” a fund manager with a mid-sized fund house said.  

 

In the primary market today, National Bank for Agriculture and Rural Development raised up to 43.72 bln rupees through the reissue of its 5.23%, January 2025 bond at a yield of 5.40%. Last month, the state-owned entity originally issued these bonds and had raised 50 bln rupees.

 

According to merchant bankers, other big-ticket state-owned companies are also likely to tap the primary market soon with longer-tenure papers.

 

On Wednesday, REC has invited bids for its bonds maturing on Oct 31, 2031. The company plans to raise up to 40 bln rupees through this issue.

 

Today, Informist exclusively reported that Canara Bank is likely to hit the debt market with its long anticipated Basel-III-compliant additional tier-I bond issue next week. The lender is planning to raise up to 15 bln rupees.

 

Deals aggregating 16.56 bln rupees were reported on the National Stock Exchange today, against 44.57 bln rupees on Wednesday. BSE recorded deals of 9.71 bln rupees compared with 28.15 bln rupees in the previous session.

 

UDAY BONDS

In the secondary market, Ujjwal DISCOM Assurance Yojana bonds aggregating 32.00 mln rupees were traded at a weighted average yield of 6.75-7.00%, data from the RBI’s Negotiated Dealing System – Order Matching System showed.

 

* 14 mln rupees of Rajasthan’s 2025-26 bonds were traded at 6.75-6.76%

* 12 mln rupees of Telangana’s 2028 bonds were traded at 7.00%

* 6 mln rupees of Punjab’s 2029 bonds were traded at 7.00%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

WEDNESDAY

Three-year

5.25-28%5.20-28%

Five-year

5.85%5.85%

10-year

6.90-92%6.90-92%

 

End

 

Edited by Aditya Sakorkar

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2021. All rights reserved.

Source: Cogencis

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