"With the current liquidity deficit and consistent rise in short term yields, investors are not subscribing larger amounts under greenshoe options as they are expecting a further rise in yields going forward," said Nagesh Chauhan, head of debt capital market at Tipsons Group, a regular arranger of bond issues.
Yields on bonds with up to five-year maturity have risen by as much as 15 basis points over the last two weeks.
"With March being critical from NBFCs' liquidity point of view, we are likely to witness a further rise in yields due to heavy supply in short-term bonds," he added. Top-rated non-banking financial companies, including Tata Capital Financial Services and HDB Financial, have been able to raise 23.10 billion rupees during the week ended Feb. 24, marginally above their aggregate base size of 17.45 billion rupees, but only 40% of the total issue size of 59.75 billion rupees.
Eleven primary issues of up to five-year maturity were able
to garner only a small amount above their base size.
Here is a list of companies that raised funds in billion
rupees via bonds this week:
Companies Duration Base Overall Raised
size size
Tata Capital 10 years - with 0.5 3 0.81
Financial Services 3-year put
Tata Capital 5 years 1 4 1.52
Financial Services
(Reissue)
Tata Capital 3-year and 1 6 1.3
Financial Services 3-month
HDB Financial 3-year and 2.4 14.4 2.44
Services two-month
Cholamandalam 3-year and 5 10 4.52
Investment and 1-month
Finance Co
Kotak Mahindra 3-year and 0.3 1.8 0.89
Investments four-month
Kotak Mahindra 3 years 1 4.2 2.76
Investments
Axis Finance 5 years 1 3 2.63
Muthoot Finance 3-year and 1 2 1.3
1-month
Muthoot Finance 2-year and 3.5 7.6 3.35
6-month
NIIF Infrastructure 5 years 0.75 3.75 1.58
Finance (Reissue)
None of the companies mentioned above responded to emails from Reuters seeking comment.
"After a long gap, we are seeing a fourth quarter where
liquidity is tight and yields rise. With more supply lined up
through March-end, companies will have to shell out additional
incentives to get their targeted funds," said Raju Sharma, head
of fixed income at IDBI Mutual Fund.
Even top-rated companies like NABARD, which usually attracts
a wide set of investors, raised 50 billion rupees through bonds
maturing in July 2026 at 7.83% yield, which was 15 basis points
higher compared to what it paid earlier in the month.
($1 = 82.7675 Indian rupees)
(Reporting by Dharamraj Dhutia and Bhakti Tambe; Editing by
Nivedita Bhattacharjee)
