With liquidity fairly abundant, interest rates coming off and the stock markets rallying, a clutch of companies is readying to tap the bond and equity markets reports fe Bureau in Mumbai. Recent announcements indicate close to R60,000 crore could be mopped up in the next few months. Among those looking to tap investors are Reliance Industries, which wants to pick up R10,000 crore through redeemable non-convertible debentures (NCDs), and Tata Motors, which hopes to raise R3,500 crore via NCDs. Market watchers believe AAA corporates should be able to borrow five-year money — NCDs — at 9.5% compared with 10.25-10.5%, a year ago. “There is enough appetite from insurance companies, mutual funds and even bank treasuries,” said Shashikant Rathi, who heads the debt market team at Axis Bank.
Rathi pointed out that the spread between the benchmark yield and AAA corporate bonds is at a historic low of 29-25 basis points for 15-year tenures and 40-50 basis points for 10-year tenures primarily because there has been restricted supply of corporate paper. In FY14, companies raised Rs 2.62 lakh crore through private debt placements, according to Prime Database. However, just Rs 9,402 crore was raised via equity.