HUDCO, NaBFID and SIDBI to tap bond market for Rs 13,500 cr

Synopsis

Three major public sector companies, HUDCO, NaBFID, and SIDBI, are set to raise a significant ₹13,500 crore from the corporate bond market. This move comes as wholesale bank lending rates show signs of easing. Investors will be closely watching NaBFID's ₹4,000 crore bond sale. This borrowing activity highlights the companies' strategy to tap into the bond market for funding.

Mumbai: Public sector majors HUDCO, NaBFID and SIDBI are set to collectively raise ₹13,500 crore from the corporate bond market Wednesday through medium-to-long-term notes amid visible easing in wholesale bank lending rates.

Investor focus is likely to be on NaBFID's planned ₹4,000 crore 10-year bond sale, which comes at a time when the benchmark 10-year benchmark government security is trading at 6.75%. Market participants expect the NaBFID paper to be priced at a spread of roughly 100 basis points over the sovereign yield.

One basis point is a hundredth of a percentage point.

"Pricing of these bonds is complicated because the 10 year g-sec yield is also quite high. I expect NaBFID to get rates below the state bond rate," said Venkatakrishnan Srinivasan, managing partner at Rockfort Fincap, a debt advisory firm. "HUDCO, for a three-year tenure, should get a rate of around 7.75%-8%."

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"These attractive rates are available only for highly rated or public sector companies. But as bank loans are also providing competitive rates, issuers tapping the bond market have become more stringent on market borrowings," Srinivasan said. Corporates raised ₹26,752 crores in January this year, versus ₹29,798 crores in December 2025, BSE data showed.

On the other hand, wholesale loans by banks climbed, with State Bank of India (SBI) seeing a 3.4% year-on-year rise in its ₹13.33 lakh crore corporate loan book for the quarter ended December.

HDFC Bank posted a 10.3% growth in its ₹7.7 lakh crore corporate loan book and ICICI Bank's domestic corporate portfolio of about ₹3 lakh crore grew 5.6% year-on-year.

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