It's not the IPO (initial public offering) market alone which’s booming. Companies — who are in need of funds — are rushing to the bond market despite the recent uncertainties related to the yields and rising interest rates.On Monday, Food Corporation of India’s Rs 1,000 crore bond issue was oversubscribed more than nine times. The issue comprises 5-year, 7-year and 10-year bonds (for a total of Rs 1,000 crore) with coupon rates of 7.1 per cent, 7.2 per cent and 7.3 per cent respectively. The rates are attractive as banks are charging close to 9 per cent while lending to the corporates.PowerGrid Corp’s Rs 1,000 crore 8.5-year issue at 7.10 per cent got a subscription of over Rs 1,800 crore recently. Gruh Finance Ltd raised Rs 50 crore through a bond issue, debt dealers said.ICICI Bank has now planned a Rs 450-crore tier-II issue. Canara Bank and Bank of India are also likely to come to the market soon with their Rs 500 crore and Rs 300 crore issues, respectively. Nearly a dozen companies are in the queue to raise funds from the bond market.According to banking sources, bond issues worth over Rs 7,500 crore are already being mopped up or are in the process of hitting the market. In the last quarter, companies raised Rs 11,445.50 crore witnessed in Q3. Borrowings from the bond market added up to Rs 38,000 crore in the first nine months of the fiscal, against Rs 27,500 crore in the corresponding period of the preceding fiscal.“Bond issues are still cheaper than going for a loan. Though yields have gone up recently over interest rate uncertainties, rates have stabilised for the time being,” said a senior banker.
