INSUBCONTINENT EXCLUSIVE:
Mumbai: The country's top mortgage lender, Housing Development Finance Corporation, has lit up the lacklustre bond street with the financial
year's largest private bond deal, signalling improving investor sentiment towards the housing finance sector.
An overwhelming response to an
earlier sale of perpetual bonds by State Bank of India too helped turn sentiment around which was weak until recently due to a combination
issue size, three people familiar with the matter told ET
are said to have invested in these bonds, the people said
Axis Bank is estimated to have purchased Rs 2,500 crore of the paper while ICICI Bank may have bought Rs 1,500 crore of bonds and Kotak
Mahindra Bank about Rs 500 crore
publication of this report
paper.
The bonds offered 9 per cent with a 10-year maturity
maturity and are a quasi-debt instrument
The state-run bank received two-and-a-half times more subscriptions at Rs 10,000 crore
It too rejected the additional amount.
SBI bonds were supposed to offer 9.75 per cent initially, but settled at 9.56 per cent due to huge
investor interest.
Both bonds have rallied in the secondary market immediately after listing.
HDFC bond yield dipped 13 basis points to 8.87
per cent, while SBI bonds are now yielding 11 basis points lower at 9.45 per cent, giving investors mark-to-market gains on their holding
Bond prices and yields move in opposite directions.
After a lull earlier this fiscal year, softer oil prices have helped revive investor
sentiment in the debt market, where top-rated companies are now coming to raise money to fund growth plans.
Between April and November,
companies have sold Rs 3.06 lakh crore of bonds, about 28 per cent down from the corresponding period last year, data compiled by Edelweiss
Finance showed.
The benchmark bond yield fell 55 basis points to 7.61 per cent on Friday from its October peak.
