Listed firms and banks are gearing up to raise a sum of over ₹18,000 crore during the two-day span of September 25-26 through debt instruments. The bulk of this fundraising, approximately ₹4,671 crore, is slated to take place on Monday.
The financial sector has been buzzing with activity this September, with banks and corporations already having raised more than ₹31,000 crore by September 22. This upcoming round of fundraising will push the total amount raised in the month to a staggering ₹50,000 crore.
Notably, this marks the third instance of such substantial fundraising through the bond market this year, with April witnessing over ₹52,000 crore raised and a record-breaking ₹1 trillion in June.
On September 25, Rural Electrification Corporation (REC) plans to secure up to ₹2,000 crore through perpetual bonds with a call option after a decade. Simultaneously, Shree Cement is set to raise ₹700 crore through seven-year and one-month bonds.
HDFC Ergo aims to gather ₹320 crore via 10-year subordinated bonds, while Godrej Industries and NNP Constructions are gearing up to raise ₹500 crore and ₹551 crore, respectively, through bonds with varying tenures.
HDB Financial Services, a subsidiary of HDFC Bank, is set to raise ₹300 crore through 21-month zero-coupon bonds and another ₹300 crore through the re-issue of bonds maturing in December 2026. These fundraising efforts will be facilitated through electronic bidding platforms on stock exchanges.
Experts attribute this surge in debt paper issuances to several factors, including credit growth outpacing deposit growth, negative liquidity in the banking system, and India's government securities (G-Sec) inclusion in the JP Morgan-emerging market bond index starting from June 2024, which is expected to lead to lower interest rates.
On Tuesday, major state-owned banks, including Punjab National Bank, are set to raise up to ₹3,000 crore through perpetual bonds. Canara Bank is also poised to secure ₹5,000 crore via 10-year infrastructure bonds, while NABARD plans to raise up to ₹3,000 crore through five-year social impact bonds.
In addition, India's largest lender, State Bank of India, recently completed its fourth issuance of infrastructure bonds, raising ₹10,000 crore at a 7.49% coupon rate. Remarkably, this offering attracted bids totalling ₹21,045 crore, oversubscribing by more than five times the initial base size of ₹4,000 crore, the bank reported.
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