Hudco raises Rs 2,910 crore; Sidbi garners Rs 6,000 crore through bonds

Cut-offs rise by 7-10 bps since rate cut

State-owned Housing and Urban Development Corporation (HUDCO) on Monday raised Rs 2,910 crore through bonds maturing in 10 years at a cut-off of 7.29 per cent, sources said. Additionally, the Small Industries Development Bank of India (SIDBI) raised Rs 6,000 crore through bonds maturing in four years and one month at 7.42 per cent.

 

According to market participants, yields on AAA-rated corporate bonds have hardened by 7 to 10 basis points following the 25 bps policy rate cut by the six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI).

 

Before the rate cut last week, state-owned National Bank for Financing Infrastructure and Development (NaBFID) raised Rs 5,000 crore through 15-year bonds at a cut-off rate of 7.25 per cent.

 

The rise in yields is also attributed to an increased supply of bond issuances and some large investors becoming more selective in their investment decisions, market participants said, adding that the street had already priced in a 25 bps cut by the MPC. Since the cut, yields on government securities have also inched up.

 

While HUDCO aimed to raise Rs 3,000 crore, with a base issue of Rs 500 crore and a green shoe option of Rs 2,500 crore, it ended up retaining Rs 2,910 crore. In contrast, SIDBI successfully raised the entire amount it intended to raise.

 

Meanwhile, REC plans to raise Rs 3,000 crore, with a base issue size of Rs 500 crore and a green shoe option of Rs 2,500 crore, through bonds maturing in 15 years on February 11. Additionally, REC will reissue Rs 3,000 crore worth of bonds. India Infrastructure Finance Company Limited (IIFCL) will also tap the market on February 11 to raise Rs 2,000 crore through bonds maturing in three years and 36 days.