New Delhi aims to raise 280 billion rupees ($3.39 billion) through the sale of bonds on Friday, in its penultimate debt auction of this financial year.
The auction will include 120 billion rupees of 7.26% 2033 bond , which will soon replace the existing benchmark bond. Traders also said demand for longer-duration bonds persisted on speculation of an interest rate hedge by mortgage lender Housing Development Finance Corp. The anticipation of HDFC, India's largest mortgage lender, executing an interest-rate hedge aided buying in bonds, traders said. HDFC accepted bids worth 250 billion rupees for its 10-year bond issue at an annual coupon of 7.97%, also making it biggest privately placed bond issuance for India. Sentiment had turned cautious after a spike in India and U.S. retail inflation rates, cementing bets of more rate hikes. The U.S. Federal Reserve has raised interest rates by 450 basis points (bps) since March 2022 and is widely expected to further raise them by 50 bps over the next three months, while the Reserve Bank of India has raised repo rate by 250 bps since last May, and may raise it by 25 bps in April. ($1 = 82.6750 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)
