Titans of Indian Business Heat Up Bond Market as Costs Near 2004 Low

(Bloomberg) -- India’s entrepreneurs are spicing up the rupee-denominated bond market as borrowers, including a miner, a carmaker and a port operator plan issuance.

The credit market has given many companies access to cheaper money than they can get from loans, as banks have dragged their heels passing on lower fundraising costs.

The issuers are providing more diversity in a market where local-currency note sales are off to the best start ever. Companies have already raised 1.16 trillion rupees ($16.1 billion) so far this year.

Robust Pipeline

• A busy primary issuance spell is likely this week. About 100 billion rupees worth of bond bids are due as 11 issuers have sought bids.
• Tycoon Anil Agarwal’s Vedanta Ltd. is planning to raise as much as 20 billion rupees through 10-year securities, while billionaire Gautam Adani’s Adani Ports & Special Economic Zone Ltd. is seeking bids for up to 2.8 billion rupees in a 2-part offering.
• Tata Motors Ltd. is seeking bids for as much as 5 billion rupees through notes maturing in 2026 and 2027. The automobile manufacturer is returning after a gap of three months.

Lower Costs

• Borrowing costs in the rupee-denominated corporate bond market fell sharply after the central bank earlier this month offered to inject as much as $14 billion in cash through one- and three-year funding operations.
• Average rates on top-rated three-year corporate bonds ended at 6.44% on Thursday, close to the lowest level since 2004. India’s bond markets were closed on Friday.
• Local corporate bond sales are up 13.8% for the year as against the similar period in 2019, according to data compiled by Bloomberg.

To contact the reporter on this story: Divya Patil in Mumbai at dpatil7@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Anto Antony

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