Corporate bond issuances exceed Rs 17,000 crore as yields decline
Companies are increasing debt issuances this week to take advantage of lower borrowing costs following a rally in government bond yields.
Corporate debt issuances have increased over the last few days in Mumbai, with total proposed issuances for the week exceeding Rs 17,000 crore, according to The Economic Times.
The rise in issuance comes as government bond yields rallied due to softer oil prices. The 10-year yield closed at 7.30 per cent on Tuesday, down from 7.50 per cent last week.
Public sector institutions including Nabard, REC, and Sidbi are tapping the debt markets this week. Private firms such as Bajaj Housing Finance, Lloyds Metals & Energy, Hinduja Leyland Finance, JSW, and Tata Capital Housing Finance are also issuing debt.
Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap LLP, said issuers are moving quickly to benefit from the recent rally in bond prices.
Srinivasan noted that the 10-year yield staying below 7.30 per cent may not be sustainable without further declines in crude oil prices and global bond yields.
Bank of Baroda economist Dipanwita Mazumdar expects the benchmark yield to trade between 7.25-7.35 per cent in November, noting that risks are tilted to the upside.