May 20, 2020: The trio of Tata Housing Finance, HDFC and ICICI Home Finance led the primary market bond sale, raising ₹5,475 crore collectively.
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Housing finance companies (HFCs) dominated primary bond sales at the start of this week as the government’s incentive package helped lift the sentiment of debt investors.
The spread or differential between top-rated corporate bonds and government papers — a barometer of calmness — narrowed to 80-90 basis points immediately after the government had announced the relief package, compared with 90-100 bps a few days earlier. The gauge was little changed Monday.
HDFC bonds with two-year maturity fetched 7 per cent as it raised Rs 5,000 crore.
“Non-banking finance companies are slowly coming back to primary bond sales with number of queries rising,” according to market experts. “Market appetite is gradually increasing for NBFC papers although a significant contraction in yield spread is still awaited.”
Some more clarification is awaited on NBFC package.
Tata Housing alone wiped up Rs 200 crore, paying 9.1 per cent to raise the three-year money.
Indiabulls Housing Finance too raised ₹1,030 crore, offering 9.1 per cent with three-year maturity. The bond sale came up for bidding last Friday.
