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Monday, December 5, 2022

India Corporate Bonds: Yields tad down; all eyes on FOMC outcome

Informist, Wednesday, Nov 2, 2022

 

By Subhana Shaikh

 

MUMBAI – Yields on corporate bonds ended slightly lower in the secondary market today tracking those of government bonds as market participants remained cautious ahead of the outcome of the US Federal Open Market Committee’s meeting, dealers said.

 

The US central bank is widely expected to raise rates by 75 basis points at its meet, outcome of which will be announced late in the day.

 

Market participants are keenly waiting for Fed Chairman Jerome Powell’s statement, which may provide cues to its rate hike path going forward.

 

“Corporate bond yields fell 2 basis points today tracking government bond yields, but there was not a very drastic movement in yields as investors are nervous ahead of US central bank policy meet,” a dealer with a mid-sized brokerage firm said.

 

Mainly mutual funds were said to have been on the buying and selling side in order to meet their portfolio requirements, dealers said.

 

Bonds issued by National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, REC, L&T Finance, Shriram Transport Finance Co, State Bank of India and Uttar Pradesh Power Corp were traded the most across tenures.

 

In the primary market, Hindustan Petroleum Corp raised up to 25 bln rupees through bonds maturing in five years at a coupon of 7.64%, 17 bps higher than the yield on the five-year benchmark gilt. The issue was fully subscribed.

 

Tata Capital Housing Finance raised up to 10.7 bln rupees through two bonds, one maturing in five years and the other in three years.

 

The company raised 8 bln rupees through three-year bonds at a coupon of 7.97%, which was fully subscribed, and raised 2.7 bln rupees through five-year bonds at 8.00%.

 

On Thursday, JMC Projects India has invited bids for two of its bonds–one maturing in two years and the other maturing in three years. The company plans to raise up to 1 bln rupees.

 

According to merchant bankers, a few state-owned entities and non-banking finance companies also plan to tap the primary market this week.

 

Today, Informist exclusively reported that Mahanagar Telephone Nigam intends to tap the corporate bond market in the next fortnight, after deferring its fundraising plans for almost two months.

 

The debt-ridden company plans to raise up to 70 bln rupees through government-guaranteed bonds maturing in 10 years. The issue has a base size of 5 bln rupees and a greenshoe option of 65 bln rupees. The telecom player has invited bids for its bonds on Nov 14, sources said.

 

In the secondary market, deals aggregating 37.3 bln rupees were recorded on the National Stock Exchange, against 33.17 bln rupees on Tuesday. BSE clocked deals worth 32.1 bln rupees, compared with 26.11 bln rupees the previous day.

 

UDAY BONDS

In the secondary market, none of the Ujwal DISCOM Assurance Yojana bonds were traded, data from Reserve Bank of India’s Negotiated Dealing System – Order Matching System showed.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

TUESDAY

Three-year

7.57-7.59%7.58-7.59%

Five-year

7.60-7.61%7.62-7.63%

10-year

7.70-7.72%7.72%

 

End

 

Edited by Ashish Shirke

 

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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