The primary dealer raised Rs 300 crore by issuing Tier II subordinated debentures with a maturity of 10 years and 8 months at a coupon rate of 8.30%. The company received bids worth Rs 332 crore plus an anchor bid of Rs 60 crore against a base size of Rs 200 crore for the issue. The put had a call option of Rs 100 crore.
As market makers in the government bond market, primary dealers are responsible for ensuring liquidity in the secondary market, offering continuous supply and demand. Primary dealers are also the entities that underwrite bond sales by the government to raise funds.
ICICI Securities Primary Dealership, which is a wholly owned subsidiary of ICICI Bankalso offers services in the debt capital markets.
“We are seeing increasing opportunities in rates trading and bond underwriting due to growing debt markets and a softer rate outlook. We have raised our capital by issuing Tier II bonds to take advantage of these opportunities,” Shailendra Jhingan, MD, CEO, ICICI Securities Primary Dealership told ET. Trading volumes in India’s sovereign debt market have picked up over the past year, with more and more bonds being traded regularly in the secondary market, as JP Morgan’s decision to include local debt in its EM index has spurred a surge in global interest in domestic debt. The surge in foreign buying interest and the firm demand for long-term actor bonds such as sure Corporates have pushed down sovereign bond yields, triggering Treasury gains for banks and other bond market players. The benchmark 10-year government bond yield has fallen 29 basis points since Sept. 22, the day JP Morgan made the announcement, LSEG data showed. Bond prices and yields move inversely. As of June 30, 2024, the ICICI Securities Primary Dealership benchmark index briefcase Liquid assets and securities traded stood at Rs 33,883 crore, CRISIL Ratings wrote.
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