REC raises Rs 2,625 crore through 15-year bonds at coupon rate of 7.02%

State-owned REC Ltd on Tuesday raised Rs 2,625 crore through 15-year bonds at a very attractive coupon rate of 7.02 per cent, according to sources.

 

It was eyeing Rs 3,000 crore but retained Rs 2,625 crore. Even the National Bank for Financing Infrastructure and Development (NaBFID) earlier this week raised Rs 4,240 crore through 10-year bonds at 7.04 per cent. Additionally, it raised Rs 1,469 crore through 5-year bonds at 7.03 per cent.

 

Market participants noted that spreads on AAA-rated corporate bonds have tightened considerably in April compared to previous months, driven by improved liquidity in the system and expectations of a 50–75 basis point rate cut in the upcoming policies, along with a potential shift in the monetary policy stance.

 

“The bond market has entered a bullish phase in April, driven by a sharp reversal in banking system liquidity and growing expectations of a deeper rate-cutting cycle by the RBI. The current surplus liquidity environment, coupled with increasing expectations of a cumulative 50–75 basis points of rate cuts in the upcoming policies—and an expected shift in monetary policy stance—has triggered strong demand for bonds, pushing yields lower across the curve,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.

 

“The rally is further supported by external factors such as heightened volatility in US 10-year Treasury yields amid renewed tariff tensions, a strengthening rupee, and softening Brent crude prices. These factors have brought down yields and made bond investments more attractive, creating a favourable window for issuers to raise funds,” he said.