PFC, Sidbi scrap ₹11.5K cr bond issues

Waiting for lower yields

- ANJALI KUMARI & SUBRATA PANDA

State-owned Power Finance Corporation (PFC) and Small Industries Development Bank of India (Sidbi) scrapped their scheduled bond issuances totalling ₹11,500 crore on Tuesday, after investor bids in the auction came in at yields higher than what the issuers were willing to accept, said sources aware of the development.

PFC was in the market to raise ₹3,500 crore (a ₹600-crore base issue and a ₹2,900-crore green shoe) through 15 year bonds, while SIDBI was looking to raise ₹8,000 crore (a ₹2,000-crore base issue and a ₹6,000-crore green shoe) through bonds maturing in 3 years and 4 months.

Market participants said that bids have not softened in line with expectations, underscoring the muted transmission of the recent 25-bps rate cut by the Reserve Bank of India’s Monetary Policy Committee and persistent pressure at the shorter end of the curve.

According to sources, PFC was targeting a coupon of around 7.12 percent, but investor bids came in higher, between 7.16 and 7.21 percent. Similarly, Sidbi was aiming for a cutoff of around 6.75 per cent, while bids ranged between 6.82 and 6.86 percent.

Market participants said that order books were strong, but bids landed at slightly higher yields because investors were aligning pricing with the revised sov-

• PFC was eyeing ₹3,500 crore; Sidbi was looking to raise ₹8,000 crore