REC Limited is set to tap the corporate bond market through two non-convertible debenture (NCD) series on Friday, according to reports from Business Standard. The base issue size is ₹500 crore for the three-year-and-20-day bond, with a greenshoe option of ₹2,500 crore, taking the total issue size to ₹3,000 crore. The bond will mature on August 31, 2029. Additionally, the company is offering a 15-year-and-20-day bond with a base issue size of ₹800 crore and a greenshoe option of ₹3,200 crore, totaling ₹4,000 crore. Market participants indicated that the company may exercise the greenshoe option depending on investor demand.
The RBI's dovish policy outcome has significantly improved sentiment in the corporate bond market, as reported by Business Standard. A dealer at a state-owned bank noted that "the tone was dovish and G-sec yields have come down, which has improved sentiment." This positive sentiment follows a period when issuance activity had slowed ahead of the policy review. With the policy uncertainty now behind the market and the central bank indicating that liquidity conditions will remain comfortable, dealers expect primary bond issuances to gather pace over the coming weeks.
NABARD is expected to return to the market next week after withdrawing its ₹8,000 crore five-year bond issue earlier this week, according to Business Standard. The issue had received bids worth about ₹7,166.5 crore across the offered coupon range, falling short of the targeted amount. Market participants indicated that "the NABARD issue that was withdrawn will most likely come back next week." The higher yield was bid because of the large amount of issuance, with dealers attributing the weak response to the large issue size and the rise in market yields ahead of the RBI's monetary policy decision.
With the policy uncertainty now resolved and the central bank's accommodative stance, the corporate bond market is positioned for renewed activity, as reported by Business Standard. The combination of dovish policy signals and improved market sentiment is expected to encourage more companies to return to the bond market. The successful completion of REC's bond issue and NABARD's anticipated return next week will serve as key indicators of the market's recovery momentum.
