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Wednesday, September 28, 2022

India Corporate Bonds: Ylds in thin band; HDFC, SIDBI issue eyed Tue

Informist, Monday, Jul 25, 2022

 

By Subhana Shaikh

 

MUMBAI – Yields on corporate bonds were confined to a narrow range in the secondary market today amid low trade volumes. There was minimal participation as most investors exercised caution ahead of heavy primary market supply lined up for Tuesday, dealers said.

 

Most market participants avoided placing large bets due to the recent volatility in government securities and global markets. They engaged in only requirement-based trade ahead of the outcome of the US Federal Open Market Committee’s meeting on Wednesday.

 

In the secondary market, mainly mutual funds and a few banks were said to have been active. Papers issued by State Bank of India, Small Industries Development Bank of India, Power Finance Corp, Reliance Industries, REC, Bajaj Finance, Housing Development Finance Corp, LIC Housing Finance, UP Power Corp, Andhra Pradesh State Bevearges Corp and Canara Bank were traded today.

 

“People are now waiting for HDFC and SIDBI’s issues tomorrow (Tuesday). Corporate bond activity in the secondary market is lacklustre. Demand is there, but supply is still slim. Maybe post the US Fed (meeting outcome), we can see some action,” a fund manager with a mid-sized fund house said.

 

HDFC plans to raise up to 110 bln rupees via a 10-year bond sale, while SIDBI aims to raise up to 40 bln rupees through bonds maturing on Jul 31, 2025. Biddings for both the bond offerings are scheduled for Tuesday.

 

In the primary market today, India Grid Trust raised 2.5 bln rupees through bonds maturing on Aug 5, 2025, at a coupon of 7.53%, which was fully subscribed.

 

Meanwhile, Uttar Pradesh Power Corp withdrew its plan to raise up to 40.48 bln rupees through government-serviced bonds maturing in nine years, seven months and 26 days, carrying a separately transferable redeemable principal parts structure due to high bid rates.

 

The issue had a base size of 15 bln rupees and a greenshoe option of 25.48 bln rupees. The issuer received a total of 81 bids in the range of 9.50-10.70%, according to the bid book accessed by Informist. However, the issuer had estimated the cut-off at around 9.70%, sources said.

 

“The appetite was building around 10.15-10.25%… issuer and qualified institutional investor mismatch was also seen, that’s why the bidding time was extended by 20 minutes,” a debt arranger said.

 

Late in March, the company had borrowed 39.51 bln rupees through government-serviced bonds maturing in nine years, 11 months and 23 days, which carried a separately transferable redeemable principal parts structure at a coupon of 9.70%.

 

Today, deals aggregating 37.78 bln rupees were recorded on the National Stock Exchange as against 53.66 bln rupees on Friday. BSE clocked deals worth 30.01 bln rupees compared with 24.87 bln rupees the previous day.

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 308.60 mln rupees were traded at a weighted average yield of 6.50-7.74%, data from the Reserve Bank of India’s Negotiated Dealing System – Order Matching System showed.

* 177.22 mln rupees of Rajasthan’s 2023-26 bonds were traded at 6.50-7.45%

* 55.10 mln rupees of Uttar Pradesh’s 2026 bonds were traded at 7.51%

* 70.03 mln rupees of Haryana’s 2023-26 bonds were traded at 6.50-7.74%

* 4.00 mln rupees of Himachal Pradesh’s 2030 bonds were traded at 7.74%

* 2.25 mln rupees of Tamil Nadu’s 2024 bonds were traded at 7.70%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

FRIDAY

Three-year

7.24-7.25%7.23-7.25%

Five-year

7.40-7.45%7.40-7.43%

10-year

7.65-7.73%

7.75%

 

End

 

Edited by Namrata Rao

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. 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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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