Bharti Telecom Ltd (BTL) raised ₹10,500 crore by selling short-term bonds maturing in two and three years on Tuesday, three merchant bankers told Mint. This is one of the largest corporate bond issuances so far in the current financial year, they said.
BTL, the main controlling company of telecom operator Bharti Airtel, raised ₹5,250 crore through bonds maturing in October 2027 at a coupon rate of 7.35%, and an equal amount through papers maturing in December 2028 at a coupon of 7.45%, the bankers said, requesting not to be identified.
Proceeds of the fresh bond issuances will be used to refinance the company’s existing debt maturing in the coming months, they said.
The company received strong demand from mutual fund houses, including ICICI Prudential Mutual Fund, DSP Mutual Fund, SBI Mutual Fund and other players including pension funds, foreign banks and primary dealerships.
Barclays Bank PLC and Standard Chartered Bank were joint lead managers for these bond issues, which will be allotted on October 15.
Queries emailed to Bharti Telecom remained unanswered till press time.
The bonds are rated AAA by CRISIL Ratings and CARE Ratings. AAA rated bonds are the highest-rated, safest investment-grade bonds, with the lowest default risk, issued by large, well-established companies.
In November 2024, the company had raised ₹11,150 crore through a similar short-term bond offerings.
Reuters had reported that the company has debt securities worth ₹9,750 crore that are due to mature in November-December, and has total bonds worth ₹16,150 crore set to mature during 2027-2034.
BTL’s debt sale comes as Mint on October 10 reported that India’s corporate bond market is witnessing a revival after a muted September quarter, with major borrowers lining up to raise funds as yields begin to soften following dovish signals from the Reserve Bank of India.
RBI influence
Since the start of October, yield on the 10-year benchmark government bond has fallen seven basis points to 6.50%, tracking the Reserve Bank’s dovish tone. Corporate bond yields usually move in tandem with sovereign paper, giving issuers greater confidence to tap the market.
“The current macroeconomic conditions and the outlook has opened up policy space for further supporting growth,” RBI governor Sanjay Malhotra had said during the monetary policy announcement on 1 October, remarks traders interpreted as a sign of more rate cuts ahead.
The renewed activity follows a sharp slowdown in corporate bond sales during the September quarter. Issuances plunged to ₹2 trillion from ₹3.44 trillion in the June quarter and ₹3.2 trillion a year earlier, according to data from Prime Database. Borrowers largely stayed away, as yields rose amid global uncertainty and ambiguity around the RBI’s rate trajectory.
The yield on 10-year bonds issued by the National Bank for Agriculture and Rural Development (Nabard)—a key benchmark for the corporate debt market—climbed 18-20 basis points to 7.24% in the September quarter, tracking the 10-year government bond yield, which rose 20 bps to 6.50%. It currently stands at 7.17%.
On Tuesday, the 10-year government bond closed at 6.50%, according to data from the Clearing Corp. of India Ltd. That trend, however, appears to be reversing.
“While there is scope for more, we feel that it (10-year government bond) should head downwards and a number of measures have been contemplated in this regard, including how primary G-Sec auctions will be held, the tenor of these government offerings, not only central government but also state government,” Malhotra said on October 1.
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