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. Among private sector banks ICIC Bank 3-year YTC bond contracted by 5 bps and Axis Bank 2-Year YTC spread contracted by 23 bps. The spreads of smaller banks such as Punjab and Sind Bank and The South Indian Bank have widened by 175 bps and 83 bps respectively.
Private Placements August 2020-
During August 2020, 129 issuers in total have raised Rs 693.76 billion through private placement. Reliance Jio Infratel Pvt Ltd has raised Rs 118.4 billion by issuing 4 bonds with a 12-year maturity. State Bank of India has raised Rs 89.3 billion by issuing 1 bond with 15 years maturity and spread at 35 bps. REC Ltd has raised Rs 84.7 billion by issuing a 3, 5, and 10-year maturity bond, at a spread of 100-115 bps. Bajaj Finance Ltd has raised Rs 28.7 billion by issuing 5 bonds with 2, 3, 4 and 10 years maturity, the spreads were in the range of 90 bps - 150 bps.
Rating Updates - August 2020
During August 20, India Rating Ltd has reaffirmed ratings of major issuers such as Jindal Stainless Steel, Aditya Birla Fashion and Retail Limited, Aye Finance Private Limited, etc. while assigned ratings to Bharti Telemedia Limited, Prism Johnson Limited, etc. CRISIL reaffirmed ratings of major issuers like Kotak Mahindra Bank Limited, LIC Housing Finance Limited, Kolkata Municipal Corporation, Motilal Oswal Financial Services Limited while assigned ratings to Indian Bank.