Nabard, REC, TMF Holdings, L&T Finance raise Rs 6,900 cr in stable market

Nabard, REC, TMF Holdings and L&T Finance raised about Rs 6,900 crore through bonds with varying maturities in a stable market.

Bond dealers said the yield has moved in a narrow range, unlike last week when yield depicted a rising trend. Last week, Indian Railway Finance Corporation and National Cooperative Development Corporation had cancelled bond issues on lack of demand.

The Reserve Bank will conduct Open Market Operations on Wednesday, which will have bearing on activity levels in the past few weeks before the end of fiscal year, dealers said.

REC raised just over Rs 3,600 crore through a 15-year paper carrying coupon of 7.4 per cent. The corporation had paid a coupon of 7.02 per cent for bonds with 15-year maturity in February. Tuesday’s offering had a base amount of Rs 500 crore with an option of raising another Rs 4,500 crore, they said.

Nabard raised Rs 3,000 crore through bonds with maturity of three years and one day at coupon of 5 per cent. The offering had a base amount of Rs 1,000 crore with an option of another Rs 2,000 crore. 

Tata group entity TMF Holdings raised Rs 250 crore through perpetual bonds carrying a coupon of 7.99 per cent. L&T Finance raised Rs 50 crore through bonds maturing on May 11, 2024, at a coupon of 6.45 per cent. 

The issue had a green option of Rs 200 crore, which issuer did not exercise, dealers said.

Meanwhile, 14 state governments also raised Rs 22,200 crore through state development loans (SDLs) through auction conducted by RBI.

According to ICRA, the weighted average cut-off of the 10-year SDLs eased to 7.14 per cent on March 9, from 7.18 per cent last week. This is sharper than the decline in the yield of the 10-year benchmark 5:85 GS 2030 to 6.21 per cent on Tuesday from 6.24 per cent the same day last week.

The government bond yield has been on the rise, chiefly owing to the weakness in demand for these securities given the increased supply of the same consequent to the higher borrowings by the governments (Centre and state).

The domestic bond markets have also been taking cues from the rise in US Treasury yields. Added to this is the concerns over inflation with the rise in global commodity prices (viz. crude oil) have also been pushing up yields, according to CARE Ratings.