Informist, Thursday, Oct 21, 2021
By Subhana Shaikh
MUMBAI – Yields on corporate bonds remained steady across tenures in the secondary market today amid muted trade volume as investors flocked to the primary market where Canara Bank sought bids for its Basel-III compliant tier-I bonds, dealers said.
Canara Bank raised 15 bln rupees through its Basel-III compliant tier-I bonds at a coupon of 8.40%, which was fully subscribed.
The success of Canara Bank’s bond issue will pave the way for other public sector banks to tap the corporate bond market through such papers, said merchant bankers.
Today, Dabur India raised 2.5 bln rupees through bonds maturing in three years, at a pre-set coupon of 4.95%.
On Friday, Bharat Oman Refineries Ltd has invited bids for bonds maturing in five years. The company plans to raise up to 10 bln rupees.
In the secondary market, mainly mutual fund houses were said to have been on the buying and selling side.
Some market participants remained on the sidelines as they are waiting for the minutes of the Monetary Policy Committee’s October policy review meeting, which will be released on Friday.
“Corporate bond market was steady, unlike the sharp movement seen in government securities. There was not much activity,” said a fund manager with a mid-sized fund house. According to dealers, this steady movement has come after the persistent selling took a pause.
Bonds issued by Housing Development Finance Corp, State Bank of India, Motherson Sumi Systems, Bharat Sanchar Nigam, REC, Indian Railway Finance Corp, National Bank for Agriculture and Rural Development, Power Finance Corp, Axis Bank, and LIC Housing Finance were traded the most.
Deals aggregating 50.88 bln rupees were reported on the National Stock Exchange today, against 26.33 bln rupees on Wednesday. BSE recorded deals worth 32.59 bln rupees compared with 22.88 bln rupees in the previous session.
UDAY BONDS
In the secondary market, Ujjwal DISCOM Assurance Yojana bonds aggregating 32 mln rupees were traded at a weighted average yield of 6.65-6.96%, data from the RBI’s Negotiated Dealing System – Order Matching System showed.
* 7 mln rupees of Haryana’s 2026 bonds were traded at 6.65%
* 25 mln rupees of Uttar Pradesh’s 2031 bonds were traded at 6.96%
BENCHMARK LEVELS FOR CORPORATE BONDS:
End
Edited by Ashish Shirke
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Source: Cogencis
