Public sector company Nuclear Power Corporation of India (NPCIL) raised R2,200 crore on Friday at a coupon rate of 8.14% to be paid semi-annually, sources said, adding that the bonds came with stripped tenures ranging from 11 to 15 years.
The company managed to raise bonds at a discount of 26 bps from its previous issue. Earlier, NPCIL had issued bonds worth R2,200 crore in November 2014 at a coupon rate of 8.4%. The issue was conducted with the same stripped tenures ranging from 11 to 15 years.
“The borrowed amount will be used to part-finance our expansion plans. Investors have a positive viewpoint about the company as they see a value creation going ahead, which is why we are seeing such an attractive pricing even during the end of March,” said a source in NPCIL.
After the US Fed hinted that it was in no hurry to raise interest rates, the 10-year benchmark yield —the proxy for pricing PSU bonds — had softened by three basis points.
The next trigger for a possible rise or fall in rates would be the April 7 monetary policy although expectations of a repo rate cut have dampened after the February consumer price inflation number saw a 26 basis points rise from January.
“The market is not expecting a rate cut in this monetary policy. However, the RBI’s tone would be something that would be keenly observed, especially after the Fed statement. Till then, the yields are likely to remain at current levels or see a bit of hardening,” said Ashish Jalan, assistant vice-president at SPA Securities.
March has seen a number of public sector units (PSUs) lining up to tap the bond markets. State-owned Power Finance Corporation (PFC) recently raised R2,300 crore through bonds of multiple tenures, while Rural Electrification Corporation (REC) raised R700 crore in early March.
Power Finance Corporation (PFC), National Cooperative Development Corporation (NCDC), Damodar Valley Corporation (DVC), Indian Railway Finance Corporation (IRFC) and Tamil Nadu Generation and Distribution Corporation (TANGEDCO) are some of the public sector units that are likely to hit the bond markets, according to sources.