Companies tap bond market amid rate hike expectations
Indian companies are actively raising funds through the bond market. This activity occurs despite anticipated interest rate increases and tighter liquidity. Large issuers are securing financing before borrowing costs potentially rise further. Surplus banking system liquidity is driving demand for corporate bond issuances. Companies are expected to raise over one thousand crore rupees this week.
Indian companies are continuing to tap the bond market despite higher yields and an uncertain rate outlook, according to corporate bond experts. The Monetary Policy Committee is expected to meet on October 5-7, with a potential quarter-percentage-point hike in the policy rate to 5.50%. Several large issuers have already raised funds, with Edelweiss Financial Services issuing a ₹300 crore non-convertible debenture, Bajaj Auto Credit raising ₹250 crore, and IndiaFirst Life Insurance Company planning to raise ₹200 crore.
Vedanta and Power Grid Corporation have also approved significant bond issuances. The banking system's surplus liquidity, fueled by FCNR(B) deposits, has left banks seeking avenues to deploy these funds, making corporate bond issuances an attractive option.
Brief written by urgent.news from The Economic Times - Top News's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
