Informist, Monday, May 29, 2023
By Parth Singh
NEW DELHI – Yields on corporate bonds ended steady across tenures in the secondary market amid muted volume as investors refrained from placing large bets due to lack of firm domestic cues, dealers said.
In the primary market, India Infrastructure Finance Co Ltd raised 5 bln rupees through bonds maturing on May 31, 2033 at a coupon of 7.46%. Demand for this issue majorly came from Employees’ Provident Fund Organisation, dealers said.
“IIFCL had their full issue subscribed by a single buyer at the same price, but due to some internal reason they did not go with it,” a primary dealer at a brokerage firm said.
On Tuesday, frequent issuer Power Finance Corp has invited bids for re-issuance of its two bonds with different maturities. The state-owned company plans to raise up to 40 bln rupees through these bonds.
According to merchant bankers, some private lending companies and public-sector undertakings are likely to follow suit with big-ticket issuances this week.
“Issuers might take a back-seat in the coming week, as they would like to get some direction from the policy. A pause is already factored in, but the market will look for more cues as they typically do before policy,” a debt dealer said.
The Reserve Bank of India is set to announce its latest policy rate decision next week. Investors expect the domestic rate-setting panel to announce a prolonged pause at the occasion.
Only mutual fund houses and insurance companies were active in the secondary market for their requirement-based trading, dealers said.
Bonds issued by Housing Development Finance Corp, REC, LIC Housing Finance, Andhra Pradesh State Beverages Corp, Indian Railway Finance Corp, and National Bank for Agriculture and Rural Development were traded the most across tenures.
Limited participation led to lacklustre volumes today. Deals aggregating 46 bln rupees were recorded on the National Stock Exchange and BSE combined.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds worth 2.70 mln rupees were traded at a weighted average yield of 7.01-7.78%, according to data from the RBI’s Negotiated Dealing System-Order Matching System.
* 2 mln rupees of Rajasthan’s 2024–25 bonds were traded at 7.01-7.78%
* 0.70 mln rupees of Haryana’s 2024–25 bonds were traded at 7.15-7.28%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Maheswaran Parameswaran
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