Informist, Tuesday, May 23, 2023
By Asmita Patil
MUMBAI – After scaling down on Monday, yields on corporate bonds remained range bound in the secondary market today as investors shifted their focus on primary issuances from public sector undertakings, scheduled for Wednesday, dealers said.
Indian Railway Finance Corp plans to tap the primary market to raise up to 25 bln rupees through bonds maturing on Oct 15, 2026, whereas, National Housing Bank aims to raise up to 20 bln rupees through bonds maturing on Jun 23, 2026. According to market participants, expected cut-off for these two issuances is in the range of 7.30-7.35%.
“Market has been better since RBI’s (the Reserve Bank of India’s) announcement, so, these PSU primaries should go at finer levels tomorrow (Wednesday),” a dealer with at private bank said.
ONGC Petro Additions plans to tap the market to borrow up to 7.5 bln rupees through bonds maturing on Nov 22, 2024.
All of these issuers have invited bids to raise funds on Wednesday.
Today, Housing Development Finance Corp raised 36.35 bln rupees through bonds maturing in 10-years at a coupon of 7.65%. The bonds carry a put option at the end of three years from the date of allotment.
In the secondary market, only insurance companies and mutual funds were active today, dealers said.
Bonds issued by Housing Development Finance Corp, REC, LIC Housing Finance, National Bank for Agriculture and Rural Development, Power Finance Corp, and Small Industries Development Bank of India were traded the most across tenures.
“Expected surplus liquidity has already been discounted in levels, it’s a long haul to see how it will pan out in future, so everyone will just wait and watch now,” a dealer with a mid-sized brokerage firm said.
The RBI on Friday announced withdrawal of 2,000-rupee denomination banknotes from circulation by Sep 30. The RBI said the total value of these notes in circulation was 3.62 trln rupees as of Mar 31.
However, market participants believe the move will lead to increase in the banking system liquidity by 500.00 bln rupees to 1.50 trln rupees by the end of September.
“People are expecting this (the RBI’s announcement) to have demonetisation kind of impact which I don’t think it will have…I don’t think we will hit even a 1 lakh crore (1 trln rupees) mark (on incremental deposits),” a debt-fund manager with a mid-sized mutual fund house said.
Lack of participation weighed on trade volume in the secondary market. Today, deals aggregating 60 bln rupees were recorded on the National Stock Exchange and BSE combined as against 101 bln rupees on Monday.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 71.60 mln rupees were traded at a weighted average yield of 7.09-7.55%, according to data from the RBI’s Negotiated Dealing System-Order Matching System.
* 17 mln rupees of Tamil Nadu’s 2028–29 bonds were traded at 7.34-7.38%
* 14.40 mln rupees of Punjab’s 2028–31 bonds were traded at 7.34-7.55%
* 28 mln rupees of Telangana’s 2026–31 bonds were traded at 7.26-7.35%
* 11.70 mln rupees of Haryana’s 2024–25 bonds were traded at 7.26-7.35%
* 0.50 mln rupees of Rajasthan’s 2025 bonds were traded at 7.09%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Akul Nishant Akhoury
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