A decrease in corporate bond yields in the secondary market following a dovish monetary policy has prompted three state-run companies to raise approximately ₹7,750 crore ($880.5 million) through bond sales, according to three merchant bankers familiar with the situation.
Hindustan Petroleum Corporation Limited (HPCL) plans to secure around ₹5,000 crore, while Bharat Petroleum Corporation Limited (BPCL) aims to raise about ₹2,000 crore. Both oil marketing companies are expected to issue bonds with a maturity of approximately five years in the coming days, the bankers noted.
Additionally, North Eastern Electric Power Corporation Limited (NEEPCO), a fully owned subsidiary of NTPC, is seeking to raise around ₹750 crore through bonds maturing in five to eight years.
While BPCL last accessed the market six months ago, both NEEPCO and BPCL had previously raised funds via debt issues in May 2024 and March 2023, respectively. One banker indicated that NEEPCO had been anticipating the central bank’s policy adjustment for an extended period and is likely to be the first among the three to proceed with its issuance.
Efforts to contact the companies for comment went unanswered, and the bankers requested anonymity as they are not authorized to discuss the matter publicly.
Earlier in October, the Reserve Bank of India opted to maintain the status quo on policy rates, stating that a drop in inflation has provided leeway for measures to support economic growth. The decline in retail inflation to an eight-month low, coupled with expectations of a record low reading in October, has reinforced predictions of a rate cut in December.
Bond markets have reacted positively, with AAA-rated shorter duration corporate bond yields decreasing by 6 to 10 basis points, according to data compiled by LSEG. Although corporate bond issuances slowed in September, industry experts expect an uptick this month as falling yields are likely to motivate both issuers and investors.
