There are others too who are lining up their bond issuance in the market. REC Ltd is in the process of introducing two bonds — on Wednesday there could be an issuance of up to Rs 1,500 crore of 10-year bond, and a few days later, there could be an issuance of up to Rs 1,200 crore for maturities up to four year, said sources.
ONGC Petro Additions Ltd will issue later this week three-year three-month bond for up to Rs 500 crore.
NHPC Ltd is in the market to raise Rs 2,000 crore next week. North Eastern Electric Power Corporation Ltd (NEEPCO) is also raising Rs 150 crore from the market this week.
Last week, however, a few entities withdrew their bond issuance, owing to higher than expected rate asked by the market.
Bank of Baroda was offered 9.4 per cent for its certificates of deposits (CDs), which was not acceptable to the bank. Punjab and Sind Bank also withdrew its CD issuance.
Power Finance Corporation (PFC) also withdrew its issuance, deciding to place it after the RBI policy announcement on October 4, said market sources.
“The second half is usually a busy season and that means lots of issuances. A few issuances would be withdrawn for various factors, such as interest rates not agreeable to the companies, or there is no urgent need for fresh money, etc. But those who need urgent money are raising bonds on a regular basis,” said a senior bond arranger.
Such bond withdrawals are a regular feature in the bond market, and doesn’t reflect lack of appetite for bonds, say arrangers.
But issuance for the retail investors don’t get fructify easily because of demand factors.
National Highways Authority of India, PFC, REC all had plans to raise money through taxable bonds from retail investors, but so far no such bond has come this year, ironically because rates are too low now for the retail investors to take interest in PSU bond offerings, said dealers.