Indian Oil Corporation is set to raise around Rs 200 crore through a non-convertible debenture issue. Though the company is yet to finalise the coupon rate and the tenure of the paper, investment banking sources said the issue is likely to hit the market in the first week of July.
According to the sources, Kotak Mahindra Capital Company, ICICI Securities and Finance, JP Morgan Securities, SBI Capital and DSP Merrill Lynch are the lead arrangers of the issue.
After a host of new issues during the month, activity in the primary market of corporate debt is likely to come down. According to the bond dealers, taking advantage of the lower yields, many of the AAA-rated companies have already completed their borrowing programme for the first half of the financial year.
The spread between the yields of corporate debt papers and government securities of equal maturity has come down to 70-85 basis points, as the corporates resorted to the debt market on the back of turmoil in the stock market.
A bond dealer said, "We do not expect any new big issues till September. Till that time, only state-run infrastructure companies will hit the market."
In the recent past, corporates have raised loans at record lows. For example, Bharat Petroleum Corporation Ltd and Indal mopped up Rs 345 crore and Rs 50 crore, respectively, at 9.95 per cent through a 5-year paper.
