HUDCO, PFC, others raise over Rs 10,000 crore via bond sales

The corporate bond market in Mumbai was abuzz with activity on Friday, pulling in an impressive ₹8,441 crore. Leading the charge was HUDCO, which rolled out ₹2,500 crore of 10-year bonds, garnering substantial bids. Meanwhile, the Power Finance Corporation secured funds via 18-month and 5-year bonds, reflecting robust investor confidence.

Mumbai: The corporate bond market saw three large issuances on Friday, raising a combined ₹8,441 crore, as issuers stepped up borrowings amid softer yields. State-owned HUDCO raised ₹2,500 crore through 10-year bonds, while PFC accepted ₹2,968 crore for 18-month bonds and ₹2,973 crore for five-year papers.

Along with these three, Tata Capital Housing Finance, Nirmal Bang Securities and others issued smaller papers.

"The HUDCO paper was likely presold, there were only three large bids which included LIC and EPFO, as this was a longer tenured paper. It is because of this that their rate was below 8%," said a corporate bond dealer at a private firm.

HUDCO was able to get a rate of 7.92% for their 10 year paper, while the Power Finance Corporation paper for 18 months and 5 years had rates of 8.21% and 8.05% respectively. The 10-year benchmark government bond yield rose 4 bps from its previous close to settle at 7.29% on Friday. While the yield has edged up from around 7.15% levels seen last week, it remains below the 7.50% high recorded in October, according to CCIL data.

A relatively softer benchmark yield and expectations of a rate hike in December has prompted a rush of corporate bond issuances of the past few weeks. Tata Capital Housing Finance raised ₹753 crore, while Nirmal Bang Securities raised ₹50 crore. These two issuances, along with a few other smaller bonds takes the single day aggregate to over ₹10,000 crore.