India Corporate Bonds
Ylds flat ahead of Union Budget; volume dull
This story was originally published at 20:49 IST on 19 July 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds ended the week on a flat note as market participants refrained from taking significant positions ahead of the Union Budget for 2024-25 (Apr-Mar), set to be presented Tuesday. This shifted investors' focus to the primary market amid multiple bond issuances due next week, dealers said.
"Yields were broadly flat... nothing is happening... it is expected to stay dull like this until the Union Budget is announced," a dealer at a mid-sized brokerage said.
Most participants focused on fulfilling immediate requirements rather than taking on additional risks ahead of the Union Budget, dealers said. Only a few banks and mutual funds were active on both the buying and selling sides today.
The dull participation affected overall trade volume, with deals worth only 65.85 bln rupees being recorded on the National Stock Exchange and BSE combined, compared with 86.02 bln rupees on Thursday.
Bonds issued by REC, Indian Railway Finance Corp, Andhra Pradesh State Beverages Corp, Power Finance Corp, Indiabulls Housing Finance, National Bank for Agriculture and Rural Development, Navi Finserv, and Uttar Pradesh Power Corp were traded the most across tenures today.
Amid dull activity on the secondary side, market players are now looking forward to a slew of primary bond issuances. Issuances worth around 142 bln rupees are lined up on Monday.
Power Grid Corp of India has invited bids to raise up to 28.50 bln rupees through bonds maturing in 10 years. Indian Renewable Energy Development Agency plans to raise up to 15 bln rupees through bonds maturing on Jul 22, 2039.
Several non-banking financiers are also in queue to raise funds through the debt market on Monday. LIC Housing Finance has invited bids to raise up to 32.50 bln rupees through the reissuance of two bonds with different maturities. HDB Financial Services also plans to raise up to 25 bln rupees through the reissuance of two bonds of different maturities.
Bajaj Housing Finance will reissue its July 2034 bond to raise up to 15 bln rupees, while Tata Capital will tap the market to raise up to 10 bln rupees through the reissuance of bonds maturing in May 2026.
Merchant bankers believe several banks, corporations, public-sector entities, and non-banking finance companies will raise funds through the corporate bond market in Jul-Sep.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to 55.50 mln rupees were traded at a weighted average yield of 7.3522-7.3975%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching system showed.
* 20.00 mln rupees of Uttar Pradesh's Jun 2, 2028, bonds were traded at 7.3522%
* 15.70 mln rupees of Haryana's Mar 31, 2025, bonds were traded at 7.3953%
* 10.00 mln rupees of Punjab's Mar 30, 2026, bonds were traded at 7.3950%
* 9.80 mln rupees of Chhattisgarh's Mar 28, 2026, bonds were traded at 7.3975%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | THURSDAY |
Three-year | 7.61-7.62% | 7.62-7.63% |
Five-year | 7.60-7.61% | 7.59-7.61% |
10-year | 7.47-7.50% | 7.47-7.50% |
End
Edited by Rajeev Pai
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