Informist, Friday, May 20, 2022

By Subhana Shaikh and Sanjana Raina

MUMBAI – Taking markets by surprise, A.K. Capital moved to the top spot on the corporate bond arranger league table in April as three solely arranged deals helped it climb four notches from the position it occupied a month ago.

For the last four years, the top position had consistently been occupied by either one of the three largest private banks--HDFC Bank, ICICI Bank, and Axis Bank, according to data compiled by Informist.

A.K. Capital managed six bond deals amounting to 13.28 bln rupees last month, of which 11.73 bln rupees was mobilised through the deals it managed solely, as per data compiled by Informist.

ICICI Bank, which had occupied top spot in March, fell to the second place in April with a total of five bond offerings worth 12.30 bln rupees. Of this, 5 bln rupees worth of bond offerings for Bharat Forge and Torrent Power were solely managed by the private bank.

HDFC Bank mobilised just 9.25 bln rupees last month by jointly participating in a single bond deal for Indian Oil Corp Ltd. 

Last month, ICICI Securities Primary Dealership ranked fourth, having managed three deals worth 5.95 bln rupees, while LKP Securities secured the fifth spot by mobilising 4.50 bln rupees through two deals.

Axis Bank, which had ranked second in March, fell to the sixth spot, arranging just one deal totalling 2.65 bln rupees. Barring Axis Bank and LKP Securities, all the six bond arrangers were engaged in a big-ticket issuance by the state-owned Indian Oil Corp Ltd.

Fund-raising through private placement of corporate bonds slumped in April as most companies stayed on the sidelines at the beginning of the fiscal year 2022-23 (Apr-Mar), which also coincided with a surge in yields. 

Primary issuances are typically low in April as companies seek mandatory approvals for raising funds through the debt route, while drawing business plans for the financial year, according to merchant bankers.

Companies raised 251.45 bln rupees in April through placement of 113 bonds, compared with 941 bln rupees mobilised through 249 bonds in March, data compiled by Informist showed. On a year-on-year basis, fundraising through the private placement route slumped over 30%.

The higher amount raised in March was mostly due to both private and public sector companies tapping the bond market aggressively to shore up capital reserves as the financial year drew to a close.

Also, companies were deterred by a spike in yields last month after the Reserve Bank of India’s Monetary Policy Committee signalled an end to its policy accommodation which has been in place since June 2019 and persisted during the COVID-19 pandemic. 

Yields on corporate bonds in April rose in tandem with those on government bonds, with the yield on the 10-year benchmark paper crossing the 7.00% level. Gilt yields remained elevated on fears of sharper rate hikes after the CPI inflation print for March surged to a 17-month high of 7%, topping the RBI's comfort band of 2-6%.

Yields on three-year papers issued by the National Bank for Agriculture and Rural Development, considered the benchmark in the corporate bond market, rose about 47 basis points last month, while papers maturing in five and 10 years ticked up around 22 bps and 27 bps, respectively.  

Following is a list of corporate bond arrangers in order of the quantum arranged in April: 

End 

NOTES:   
* Based on data compiled by Informist from published news reports   
* May not include all the deals struck during the month/quarter   
* Banker who arranged the highest quantum of deals, irrespective of the number of deals, is ranked first   
* Deals executed directly with investors are not considered 

Edited by Akul Nishant Akhoury

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