IPCL, EID Parry hit debt market with NCD issues

Sujoy Manna

Mumbai, July 15: Indian Petroleum Corporation Ltd (IPCL) has tapped the debt market with a Rs 100 crore NCD issue. According to market sources, the coupon rate for the issue has been decided through book-building and is around 9.82 to 10.2 per cent. The issue has a tenor of three years with a credit rating of A+ and is lead managed by SBI Caps.

EID Parry has, also, tapped the market with Rs 15 crore NCD issue with same tenor with a coupon rate of 9.46 to 9.71 per cent. The lead manager to the issue is Citibank.

The coupon rate for IPCL issue is higher than the yields for the benchmark 3-year government paper because of the low rating. Currently, the 3-year government paper is quoting at a coupon rate of 8.16 to 8.84 per cent.

The wider difference in spread between AAA rated bonds over government paper is likely to see more corporate paper hitting in the market. Mutual fund flows are likely to be healthy and this segment is expected to see more investment in corporate debt. The corporate debt market has been witnessing more activities in the primary market with new issuances flooding the market.

The primary market is expected to remain buoyant with lower interest rate regime as more corporates are aiming at locking in at existing low yields.