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Informist, Monday, Sep 2, 2024

By Vaishali Tyagi and Ashna Mariam George

MUMBAI – Yields on corporate bonds ended steady in the secondary market today owing to subdued participation from market players, dealers said. Most traders were absent from the market today owing to the financial market in the US being closed today on account of Labour Day, they said.

"There was a holiday in the US today, therefore, not much activity was seen in the market and another day passed without it being eventful," a dealer at a mid-sized brokerage firm said. "There were players active in the market today but with very dull demand and supply." 

Only a few mutual funds were said to have been active on both the buying and selling sides, while banks were majorly on the buying side, stocking up on longer tenure papers.

Today, thin participation kept trade volume muted, with deals aggregating 59.98 bln rupees being recorded on the National Stock Exchange and BSE combined, as against 74.31 bln rupees on Friday.

Dealers said that market participants have been eagerly awaiting rate cut signals from the US and, therefore, most traders have a cautious approach and the remaining are on the sidelines. "See, majorly requirement-based trading is happening these days," a dealer at a mid-sized brokerage firm said. "Market players are cautious, and sellers (of bonds) are holding out for a rate cut." 

Papers issued by REC, Uttar Pradesh Power Corp, Cholamandalam Investment And Finance Co, HDB Financial Services, Keertana Finserv, Navi Finserv, and Spandana Sphoorty Financial, were traded the most on the exchanges.

Today, there was not much action in the primary market as well. However, merchant bankers said that issuances in the primary market would pick up this month, as is typical towards the end of a financial quarter, dealers said. In terms of new issuances, Axis Finance and several other tier-I non-banking financial companies are expected to tap the market this week, which may provide some push to market activity.

On Tuesday, Small Industries Development Bank of India has invited bids to raise up to 50 bln rupees through bonds maturing on Sep 5, 2029. Power Finance Corp will also tap the market to raise up to 35 bln rupees through bonds maturing on Oct 16, 2034.

Merchant bankers said the private sector banks like Axis Bank and ICICI Bank may announce its bond issue in September. According to reports, ICICI Bank may also announce a second such issue this financial year. In June, ICICI Bank raised 30 bln rupees through infrastructure bonds maturing in 10 years at a coupon of 7.53%. 

On Friday, Bank of Baroda plans to tap the market to raise up to 50 bln rupees through an infrastructure bond maturing in 10 years and is likely to invite bids for the same on Friday. On Aug 26, the state-owned bank raised 50 bln rupees through 10-year infrastructure bond at a coupon of 7.30%.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating 19.00 mln rupees were traded at a weighted average yield of 7.2355-7.2800%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* 10.00 mln rupees of Telangana's March 2032 bonds were traded at 7.2800%

* 8.00 mln rupees of Chhattisgarh's March 2029 bonds were traded at 7.2569%

* 1.00 mln rupees of Haryana's March 2025 bonds were traded at 7.2355%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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