Bond binge- India Inc, banks to raise Rs 30K crore this week

Bond binge: India Inc, banks to raise Rs 30K crore this week

As the calendar year draws to a close, fundraising through bonds has surged. Companies and banks are aiming to raise over Rs 30,000 crore through bond issuances this week, with HDFC Bank, Shriram Finance, and Tata Projects issuing bonds amounting to Rs 13,500 crore on Monday.

National Bank for Agriculture and Rural Development (Nabard) is planning to raise Rs 10,000 crore through infrastructure bonds while Bank of Baroda is eyeing Rs 2,500 crore via tier-II bonds on Wednesday. National Bank for Financing Infrastructure and Development (NaBFID) is aiming to mop up Rs 10,000 crore through 15-year infrastructure bonds on Thursday.

“Volatility in yields makes investors and issuers cautious and keep them away from the market. Yields have now stabilised because there is clarity over the future trajectory of interest rates,” Ajay Manglunia, managing director and head – investment grade group, JM Financial, told FE. “With the expectation of rates cooling off next year, investors do not want to miss the opportunity to invest in long-tenure bonds at a higher rate.”

HDFC Bank raised Rs 7,425 crore at a coupon rate of 7.71% through its AAA-rated 10-year-long infra bonds — the first bond issuance from the lender since its merger with mortgage financier Housing Development Finance Corporation in July.

Shriram Finance sold two bonds amounting to Rs 2,000 crore and Tata Projects issued two bonds totalling Rs 1,150 crore. Indian Renewable Energy Development Agency is planning to mop up Rs 2,000 crore by issuing non-convertible debentures on Wednesday.  

Experts expect fundraising through bonds to continue to remain strong in December.

“Last year, we saw strong fundraising via bonds in November and December. Companies and banks raised around `90,000 crore in November 2022 and Rs 80,000 crore in last month via bonds,” said Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap. “They had raised `1 trillion via bonds in December last year. We are expecting high bond issuances this month.  Several investors want to complete their quota of investment in corporate bonds, so the appetite is strong for AAA-rated term bonds.”    

Last week, bond issuances by Power Finance Corporation and Indian Railway Finance Corporation received strong response, with investors bidding more than double the notified amount.

Bond issuances by these PSUs received bids aggregating Rs 14,589 crore, against the total notified amount of Rs 6,500 crore.