Primary Corporate Bond Market

During December 2020, 161 issuers in total have raised Rs 1200 billion through private placements. JIO Digital Fibre has raised Rs 253.42 billion by issuing 3 bonds. NHAI has raised Rs 120 billion by issuing 2 bonds with 16- and 20-years maturity at spreads of 58 bps and 35 bps respectively. RKM PowerGen has raised Rs 85.97 billion by issuing 3 bonds. HDFC Ltd. has raised Rs 75 billion by issuing 2 bonds with 1-years maturity at 114 & 90 bps, respectively.

During November 2020, 131 issuers in total have raised Rs 484.35 billion through private placements. NABARD has raised Rs 72.3 billion by issuing 4 bonds. NHAI has raised Rs 50 billion by issuing 1 bond with 17 years maturity at spreads of 59 bps. HDFC Ltd. has raised Rs 30 billion by issuing a 5-year maturity bond, at a spread of 57 bps. Adani Properties Pvt. Ltd. has raised Rs 28.4 billion by issuing 2-years maturity zero coupon bond.

During October 2020, 100 issuers in total have raised Rs 642.55 billion through private placement. Food Corporation of India has raised Rs 80 billion by issuing 1 bond. REC Ltd. has raised Rs 78 billion by issuing 2 bonds with 5 years maturity and 10 years maturity with spread of 61 bps and 82 bps, respectively. Indian Railway Finance Corporation Ltd has raised Rs 60 billion by issuing a 20-year maturity bond, at a spread of 6 bps. State Bank of India has raised Rs 50 billion by issuing 10-years maturity bond at a yield of 5.83%.

Pre-COVID spread and current spread comparison show that the spread has largely contracted for strong NBFCs, HFCs and Banks while for the weaker issuers, the spread is still at higher levels.

Pre-COVID spread and current spread comparison show that the tax-free bond spread has contracted across maturities and across issuers. Perpetual bonds spread movement shows that the spread of private banks has widened while the spread of public sector banks contracted, Bank of Baroda 4-year YTC spread contracted by 12 bps while SBI 4-year YTC spread contracted by 93 bps. Among private sector banks ICIC Bank 3-year YTC widened by 89 bps and Axis Bank 1-Year YTC spread widened by 169 bps.

Pre-COVID spread and current spread comparison show that the tax-free bond spread has contracted across maturities and across issuers. Perpetual bonds spread movement shows that the spread of lower-rated private sector banks such as Punjab & Sind Bank and The South Indian Bank has widened while the spread of big private sector banks and public sector banks has contracted, Bank of Baroda 4-year YTC spread contracted by 14 bps while SBI 4-year YTC spread contracted by 86 bps.