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Reuters
30-04-2025
- Business
- Reuters
$1.5 billion bond rush on the cards as Indian firms step up debt raises post RBI liquidity boost
MUMBAI, April 30 (Reuters) - Indian companies, led by state-run firms, have accelerated their plans to raise debt from the markets as the central bank's fresh bond purchase scheme surprised markets and pushed borrowing costs lower. Four Indian state-run firms - Power Finance Corp ( opens new tab, NHPC, IREDA and HUDCO - are set to raise an aggregate of 125 billion rupees ($1.5 billion) and have invited bids on Wednesday and Friday. State-run firms have already raised around 393 billion rupees via bonds earlier this month. "The recent rush of issuances by state-run firms looks like a well-timed move to benefit from softening yields after the Reserve Bank of India's bond buying announcement," Suresh Darak, founder of Bondbazaar, an online bond trading platform. On Monday evening, the RBI announced it plans to buy bonds worth 1.25 trillion rupees through open market purchases, after picking up bonds worth 1.20 trillion rupees in April. AAA-rated corporate bond yields across the curve have eased by around 5-10 basis points since then, and spreads with government bond yields have shrunk further. "By front-loading borrowings, these companies are locking in lower funding costs; (it) reflects smart liability management," Darak said. Including these issuances, state-run firms have raised around 518 billion rupees - more than five times the roughly 100 billion rupees that such companies raised in April 2024. It also constitutes more than 50% of the total funds raised by companies in the first five weeks of the current fiscal 2026. "Issuers want to take advantage of the fall in yields, and that is a primary driver that they are rushing to issue debt," said Umesh Khandelwal, chief business officer at Tipsons Group. For context, all debt fundraises in the first five weeks of fiscal 2025 came up to 450 billion rupees. Apart from these firms, non-banking finance companies have also been major issuers, including Shriram Finance and Bajaj Finance. Among the borrowers hitting the market this week, PFC is raising 35 billion rupees through zero-coupon deep-discount bonds with a maturity of 10 years and one month. Traders are anticipating aggressive demand for this issue. ($1 = 85.1140 Indian rupees)
Reuters
17-03-2025
- Business
- Reuters
Investor appetite to face litmus test amid $3 billion Indian debt supply
MUMBAI, March 17 (Reuters) - Indian investor appetite is set to be tested in the run-up to the end of the financial year as companies line up $3 billion of bond issuances over two days, adding to an already heavy pipeline of debt. State-run firms, including REC ( opens new tab, NTPC ( opens new tab and Canara Bank ( opens new tab, are set to raise 140 billion rupees ($1.61 billion) on Monday and Tuesday, while non-banking financial companies (NBFC) may issue much as 164 billion rupees, above the threshold of 100 billion rupees per week. India's financial year runs from April to March. "The supply overhang remains significant, with a heavy pipeline of state development loans crowding the market, said Venkatakrishnan Srinivasan, founder and managing partner at debt advisory firm Rockfort Fincap. "Credit spreads may face pressure as institutional investors push back on pricing, demanding a higher premium to compensate for the liquidity crunch and supply glut," he added. Indian states will raise over 401 billion rupees through a debt sale on Tuesday, followed by 540 billion rupees of issuances next week, as per schedule. The supply is unlikely to be fully absorbed and yields on these bonds are expected to rise further, traders have said, especially as banking system liquidity remains in a deficit, which could widen amid tax outflows this week. The deficit was around 2 trillion rupees, as of March 16, with the shortfall persisting for the last three months. Corporate bond issuances had moderated due to a liquidity crunch but the central bank's liquidity measures have helped NBFCs - which have been under pressure for the last few months - to raise capital from the debt market, said Suresh Darak, founder of Bondbazaar, an online bond trading platform. He anticipates limited impact on high-rated corporate bonds. "Given that most provident and pension funds have likely exhausted their allocations for the fiscal year, the absorption capacity for this supply could be constrained," Rockfort Fincap's Srinivasan said. He expects that NBFCs with aggressive loan book growth may be forced to price their bonds at a modest concession to ensure full subscription, and of the total supply, around 200 billion rupees of debt could find takers. Companies Quantum in billion rupees including greenshoe option REC 60 Canara Bank 40 NTPC 40 Aditya Birla Finance 62.50 LIC Housing Finance 40 Tata Capital 16 Can Fin Homes 16 Muthoot Finance 15 NIIF Infra Finance 7.50 Hinduja Leyland Finance 7 ($1 = 86.8350 Indian rupees)
