As the quarter draws to a close, fund raising by corporates and finance firms from the bond market is on the rise. Companies, including HDFC, Tata Capital Financial Services, LIC Housing Finance and Haldia Petrochem raised over Rs 6,000 crore on Wednesday. Finance firms, including Aditya Birla Finance, Bajaj Finance and L&T Finance plan to mop up around Rs 6,000 crore on June 30 through bonds of various maturities.
There is a rush to raise funds at the end of the quarter, said bond dealers. HDFC, which is slated to merge with HDFC Bank, raised Rs 4,000 crore through a paper having 21 months’ maturity. The interest rate on the 21-month bond was quite attractive (7.28 per cent) and received bids in excess of Rs 70,000 crore, dealers said. The bond carries an “AAA\stable” rating from CRISIL.
Generally, HDFC raises funds through long-term papers (5-10 years) but it issued a short-term paper after a long time. Perhaps, it wants to avoid liability for a high-coupon paper for an entity with which it would merge, they added. Another mega housing finance company LIC Housing Finance raised Rs 500 crore through a 37-month paper at 7.61 per cent.
Fullerton India Credit, owned by Japan’s Sumitomo Mitsui Financial group, raised Rs 700 crore through a three-year paper at a coupon of 7.95 per cent. Haldia Petrochem raised Rs 500 crore — Rs 250 crore through five-year bonds at 8.95 per cent and Rs 250 crore via a seven-year paper at 8.75 per cent rate.