Yield decline spurs $880 million bond sale by 3 Indian state-run firms, bankers say

By Dharamraj Dhutia and Khushi Malhotra MUMBAI, Oct 17 (Reuters) – A decline in corporate bond yields in secondary market after a dovish monetary policy, encouraged three state-run firms to raise about 77.50 billion rupees ($880.5 million) through bonds sale, three merchant bankers aware of the matter said on Friday. State-run Hindustan Petroleum (HPCL) plans to raise around 50 billion rupees, while Bharat Petroleum (BPCL) plans to raise around 20 billion rupees. Both the oil-marketing companies would look to issue bonds of around five-year maturity over the coming days, the bankers added. Meanwhile, North Eastern Electric Power Corp (NEEPCO), a wholly-owned subsidiary of NTPC would look to raise around 7.50 billion rupees through bonds maturing in five to eight years. While BPCL tapped the market six months ago, NEEPCO and BPCL had raised funds via debt issues in May 2024 and March 2023 respectively. "NEEPCO had been waiting for the central bank policy for a long time, and should be the first one to go among the three," one of the bankers said. None of the companies responded to Reuters emails seeking a comment, while bankers requested anonymity as they are not authorised to speak to media. Earlier this month the Reserve Bank of India, maintaining status quo on policy rates, said lower inflation has opened up policy space to support growth. Drop in retail inflation to eight-month low and expectations of a record low reading in October have further cemented bets of a December rate cut. Bond markets have rallied and the AAA-rated shorter duration corporate bond yields declined by 6-10 basis points, per data compiled by LSEG. Corporate bond issuances slowed down in September, but are expected to pick up this month onward, as easing yields will likely encourage issuers and investors, bankers added. ($1 = 88.0190 Indian rupees) (Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Sumana Nandy)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)