India to begin borrowing talks this week as traders seek more ultra-long bonds

Business Recorder reported that India will open talks with bankers and investors this week to settle its bond borrowing schedule for October to March. Four treasury officials disclosed the timetable on Tuesday, but asked to stay anonymous since they lack the authority to brief reporters. Dealers expect bond traders to push for a bigger allocation of very long-dated debt.

The budget presented on February 1 initially pegged gross borrowing at a record 17.20 trillion rupees, a target later reduced to 16.09 trillion rupees following bond switches. Of that, 7.89 trillion rupees ($83.11 billion) is slated to come from bonds between October and March, roughly 49% of the annual goal, after 8.20 trillion rupees was raised from April to September.

Ultra-long bonds, which mature in 30 to 50 years, made up 24.9% of April to September borrowing, down from 35% a year earlier, and their yields have fallen about 20 basis points this fiscal year. The 10-year benchmark yield declined by only 8 basis points over the same stretch. Insurers and pension funds have stepped up buying as their asset pools grow, and Srinivas Rao Ravuri, chief investment officer at Bajaj Life Insurance, said such firms routinely hold longer-dated bonds.