Why are Indian state-run firms raising $1.93 billion through bonds this week?

Indian state-run firms are raising $1.93 billion through bonds this week to secure funding before borrowing costs potentially rise further closer to the fiscal year end.

Which Indian state-run firms are issuing bonds this week?

Top-rated state-run firms including NaBFID, HUDCO, SIDBI, and Power Finance Corp are issuing bonds this week.

What will determine the success of these bond sales?

The success of these bond sales will hinge on the firms' willingness to accept lower prices, as corporate bonds have slipped, making fundraising expensive.

Home / Business and Economy / State Firms Eye $1.9B Bond Sale Amid Rising Borrowing Costs

State Firms Eye $1.9B Bond Sale Amid Rising Borrowing Costs

11 Feb

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Summary

Indian state-run firms plan a $1.93 billion bond issuance this week.
Companies are raising funds before fiscal year-end interest rates rise.
Bond sales success hinges on firms accepting lower prices due to yields.

State Firms Eye $1.9B Bond Sale Amid Rising Borrowing Costs

Indian state-run enterprises are preparing to issue bonds totaling 175 billion rupees ($1.93 billion) within the current week. This proactive approach is driven by the expectation that borrowing costs will continue to escalate as the fiscal year draws to a close.

Several prominent state-owned entities, including National Bank for Financing Infrastructure and Development (NaBFID), Housing and Urban Development Corp (HUDCO), Small Industries Development Bank of India (SIDBI), and Power Finance Corp, are slated to launch their bond offerings. These companies aim to secure funding despite higher interest rates.

Industry experts suggest that the market's reception of these bond sales will largely depend on the pricing acceptable to the issuing firms. Recent market trends indicate that corporate bonds have seen a decline in value, making fundraising more expensive for businesses and potentially impacting their profit margins.