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Informist, Tuesday, Jul 30, 2024

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds remained flat in the secondary market today due to subdued investor participation on lack of triggers, dealers said. Only mutual funds and a few banks were active in the secondary market, while other major investors were on the sidelines, dealers said. "See, market has stabilised for now and more so it seems like a stagnant period," a dealer at a mid-sized brokerage firm said. "Following this, the next phase of movement typically begins, either upwards or downwards. Currently, yields are flat and not showing much movement and that how typically this is."

Today, overall deals aggregating only 73.42 bln rupees were recorded on the National Stock Exchange and BSE combined, against 100.59 bln rupees on Monday. Most of the activity was concentrated on short-term bonds, dealers said. 

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market today, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

Bonds issued by Arka Fincap, HDFC Bank, Andhra Pradesh State Beverages Corporation, LIC Housing Finance, Cholamandalam Investment And Finance, Power Finance Corp, National Bank for Agriculture and Rural Development, Navi Finserv, MAS Financial Services, Uttar Pradesh Power Corporation, HDB Financial Services, Shriram Finance, and Kerala Infrastructure Investment Fund were traded the most on exchanges.

Market participants turned their focus to today's packed primary market issuance, dealers said. Today, the primary market saw bond deals worth over 69 bln rupees. Non-banking finance companies and housing finance corporations heavily tapped the fixed-income market to raise funds. Cholamandalam Investment and Finance raised 20 bln rupees through bonds maturing in seven years, while Bajaj Finance raised 31.67 bln rupees through three bonds with different maturities. Aditya Birla Finance raised 4.45 bln rupees through reissuance of its paper maturing on Feb 14, 2029.

Typically, in the second quarter of the financial year, non-banking finance companies and housing finance corporations actively tap into the fixed-income market to raise funds, following a relatively quiet first quarter. According to money managers, mutual funds have been actively purchasing securities to deploy recent inflows, which led to the sparking of some activity in the market and sparking increased activity.

Also, a surge in corporate bond issuances is underway in the primary market, dealers said. Market is expected to witness more banks tapping the market with infrastructure bonds. "Infrastructure bonds has become a new line for banks to borrow from the market, I think, Bank of Baroda may tap the market as they have already taken the rating," a dealer at a mid-sized brokerage firm said. On Wednesday, Bank of Maharashtra has invited bids on Thursday for 10-year infrastructure bond to raise up to 30 bln rupees.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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