India Corporate Bonds
Yields steady; primary market in focus
This story was originally published at 21:02 IST on 13 August 2024
Register to read our real-time news.Informist, Tuesday, Aug 13, 2024
By Vaishali Tyagi
MUMBAI – Yields on corporate bonds remained steady today amid a lack of fresh domestic cues and as investors awaited a fresh round of primary market supply lined up for Wednesday, dealers said. A few mutual funds and banks were said to have been active in buying and selling paper in the secondary market today, they said. Market participants are also looking forward to US CPI data, due Wednesday, for fresh triggers, dealers said.
The US CPI is expected to have accelerated 0.2% on month in July, but remain unchanged at 3.0% on a year-on-year basis, according to a Reuters poll. Traders look forward to the data for insights into the possible rate-cut trajectory of the US Federal Reserve.
"Today's market was flattish, with no significant developments at all. Investors seem to be sitting with a wait-and-watch approach and more focused on primary market issuances," a dealer at a mid-sized brokerage firm. "Only a few banks and mutual funds were seen active today."
Bonds that exchanged hands on bourses included those of REC, Indian Railways Finance Corp, Krazybee Services, Andhra Pradesh State Beverages Corp, Keertana Finserv, Cholamandalam Investment and Finance Co, Power Finance Corp, National Bank For Agriculture And Rural Development, Incred Financial Services, Navi Finserv, Uttar Pradesh Power Corp, Muthoot Fincorp, Small Industries Development Bank of India, UGRO Capital, Shriram Finance, and Indostar Capital Finance.
Today, overall deals worth 108.54 bln rupees were recorded on the National Stock Exchange and BSE combined, compared with 68.91 bln rupees on Monday.
In the primary market today, investors remained focused on the issuance by National Bank for Agriculture and Rural Development. NABARD raised 50 bln rupees by reissuing bonds maturing on Dec 2029, at a yield of 7.5185%.
On Wednesday, six bond issuances are lined up from three issuers. While JM Financial Home Loans has invited bids to raise up to 3 bln rupees through four bonds, ICICI Home Finance has sought bids to raise up to 5 bln rupees through bonds maturing on Nov 16, 2027. Tyger Home Finance has also invited bids to raise 1 bln rupees by issuing bonds maturing on Aug 16, 2027.
"Even though the amount of the issuance is not much, the number of issuances is fine, and the market remained focused on them," a dealer at a mid-sized brokerage said. This week's activity is somewhat curtailed due to the holiday on Aug 15 for Independence Day.
UDAY BOND
In the secondary market, 3.50 mln rupees of Uttar Pradesh's Ujwal DISCOM Assurance Yojana bonds, maturing in March 2030, were traded at a weighted average yield of 7.2725%, data from the RBI's Negotiated Dealing System–Order Matching System showed.
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TODAY | MONDAY |
Three-year | 7.58-7.59% | 7.58-7.62% |
Five-year | 7.53-7.54% | 7.51-7.55% |
10-year | 7.42%-7.43% | 7.40-7.44% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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