State-owned Power Finance Corporation (PFC) on Tuesday raised about R2,300 crore through bonds of multiple tenures, said sources.
PFC raised R1,175 crore through bonds with a tenure of three years and three months at a coupon rate of 8.40%, R200 crore through five-year bonds at 8.42% and R925 crore through bonds with a tenure of 10 years and one month at a rate of 8.39%. The company had recently raised nearly R1,000 crore through 10-year bonds at a coupon rate of 8.29%, said sources.
Bond market experts said investors are awaiting the outcome of Federal Open Market Committee’s (FOMC) two-day meet which will decide the future course of interest rate regime in the US.
“Any clarity on yields can be expected after the FOMC meet. Till then, yields are expected to remain at current levels,” said Ashish Jalan, assistant vice-president at SPA Securities.
Moreover, with the dampening of rate-cut expectations after the February consumer price inflation data that saw a rise of 26 basis points from the January figure, investors seem to be carefully evaluating options before making a decision.
Ample supply of bonds toward the end of fiscal has also helped in pushing the yields up. National Cooperative Development Corporation (NCDC), Damodar Valley Corporation (DVC), Nuclear Power Corporation of India (NPCIL) and Indian Railway Finance Corporation (IRFC) are some of the public sector units that are likely hit the bond markets for raising funds, according to sources.
Recently, two companies had decided to postpone or stop the bidding on their bond issuances. On Monday, IDBI bank had postponed 10-year infrastructure bond through which it was planning to raise R1,000 core. The bank had said it will likely tap the bond markets in April.
IRFC — the finance arm of Indian Railways — had stopped bidding on its bond issue due to demand for a higher yield by investors.