Bond sales by non-banking finance companies (NBFCs) saw a slump as investors became cautious and asked for higher rates.
On April 27 and 28, seven companies raised a total of only Rs 3,544 crore out of the targeted Rs 10,400 crore, according to a report by The Economic times.
Moneycontrol could not independently verify the story.
Investors are being cautious amid the economic impact of the nationwide lockdown to contain the spread of COVID-19.
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Only HDB Financial, a unit of HDFC Bank, was able to raise its entire intended amount of Rs 1,200 crore, ET reported.
HDB's three-year commercial papers were sold at a 7.3 percent yield.
Aditya Birla Financial raised Rs 250 crore and could not completely use its greenshoe option of Rs 1,300 crore.
Over the past two months, the Reserve Bank of India (RBI) has initiated measures to boost liquidity in the system, such as open market operations (OMOs), and targeted long term repo operations (TLTROs).
"Bond investors continue to be risk averse despite several central bank measures," said Dhawal Dalal, CIO - fixed income at Edelweiss Asset Management Limited, told the paper."A number of NBFCs have failed to raise funds in desired quantities and have seen their cost of borrowings trending higher. Investors are demanding higher risk premiums," Dalal added.