Investors, especially high net worth individuals, on Wednesday booked handsome profits on the listing of the State Bank of India's third and fourth series of retail bonds.

The highlight of the trading debut was that bonds in the fourth series, which fetches a return of 9.95 per cent for 15 years for retail investors, saw a robust turnover of Rs 1,595 crore. Bonds in the third series, which fetches a return of 9.75 per cent for 15 years for retail investors, saw a modest turnover of Rs 37 crore.

Against Rs 10,000 face value, bonds in the fourth series (retail category) got listed at a premium of Rs 10,365, touched an intraday high of Rs 10,385 and a low of Rs 10,200. The last traded price of this bond was Rs 10,250.

Institutional investors

Given that allotment to institutional investors in series 3 and 4 was restricted to Rs 500 crore each, they picked up the bonds from the secondary market. The bonds were listed on the NSE and BSE on Wednesday.

“HNIs made listing gains. The coupon on the bonds has proved to be a big draw for institutional investors. Hence, pension funds and insurance companies bought the bonds from the secondary market. Typically, retail investors have a buy and hold strategy,” said a debt market analyst.

Bonds in the third series (retail category) got listed at a premium of Rs 10,250, touched an intraday high of Rs 10,280 and a low of Rs 9,965. The last traded price of this bond was below the face value at Rs 9,971.15.

In the case of bonds for investors in the non-retail category, the third series, which fetches a return of 9.30 per cent for 10 years, logged a turnover of Rs 2.26 crore. Bonds in the fourth series, which fetches a return of 9.45 per cent for 15 years, saw a turnover of Rs 15.68 lakh.

A likely benchmark

“From an individual perspective, the ‘AAA' rated SBI retail bonds are very attractive. These bonds will emerge as a benchmark for future retail bond issuances. Given that the current liquidity situation is a bit tight, only those institutions with a surplus have picked up the bonds from the secondary market,” said Mr S. Ramesh Kumar, Senior Vice-President, Asit C Mehta Investment Intermediaries.

Bonds in the third series (non-retail category) got listed at a premium of Rs 10,390, which was also the intraday high, and a low of Rs 9,855, which was the last traded price.

Bonds in the fourth series (non-retail category) got listed at a premium of Rs 10,300, which was also the intraday high, and a low of Rs 9,904. The last traded price for this bond was below the face value at Rs 9,915.

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