India’s bond market loses flavour in 1HFY18, touches 2014-low; Axis Bank top issuer

With Indian benchmark indices being buoyant since start of 2018, looks like investors have shown better appetite when it comes to investing in bond markets. This year, bond market has been the not so preferred investment portal, as primary bond offerings from Indian issuers totaled $22.6 billion in the first half of 2018.This would be a 40.9% decline compared to the same period a year ago where it stood at $38.2 billion. Not only this, number of bond issuance also fell 48.8% from a year ago.

On company-wise performance,  ABJA Investment, a wholly owned subsidiary of India’s Tata Steel Ltd, issued a total of $1.3 billion US dollar dual-tranche bond offering. This deal would be the biggest offering  from an Indian issuer in 1H2018.

According to a Reuters report, Indian companies tapping the offshore US dollar-denominated bond markets reached $3.9 billion, down 36.7% from over a year ago.

In this period, Axis Bank topped the ranking for India-issued bonds underwriting during the first half of 2018, with related proceeds of $5.6 billion from 78 eligible bond offerings and accounted for 24.6% of the market share.

The report added, Axis Bank currently leads the fee rankings for India primary bond issuance with $13.2 million in estimated fee revenue, down 51.6% from a year ago, capturing for 21.4% of the wallet share in the first half of 2018.

However, it needs to be noted that this year, the  National Bank for Agriculture and Rural Development (NABARD) is the most active Indian issuer, raising a total of $2.8 billion from fourteen bond offerings and capturing 12.5% market share in terms of India’s bond proceeds.

Financial sector bagged 77.1% of the market share that amounted to $17.4 billion. However, this was a decline of  31.9% in proceeds compared to $25.6 billion recorded in the corresponding period of previous year.

Going forward, the rupee-denominated bonds also performed on a negative trend. In 1H2018, this section of bonds recorded proceeds which amounted to Rs 1.3 trillion down 39.1% in proceeds after witnessing a record first half period last year Rs 2.2 trillion. Also, number of Indian rupee bond issuance also fell 48.9% from a year ago.