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Informist, Friday, Nov. 22, 2024

By Ashna Mariam George

MUMBAI – Yields on 10-year corporate bonds rose around 4-5 basis points in the secondary market Friday, tracking an upward movement in Indian government bond yields, dealers said. Yields on corporate bonds maturing in three years and five years ended the week on a steady note.

"Overall, the market was dull as it was a Friday, but the levels on 10-year corporate bonds followed the g-sec (government securities)," a dealer at a mid-sized mutual fund house said. Yields on Indian government bonds rose around 2 bps due to tepid demand at the weekly gilts auction which saw poor bidding, resulting in cut-offs lower than the secondary market prices.

However, yields on corporate bonds maturing in three years and five years remained steady as market participants limited their activity to need-based trading, dealers said. "The market was almost flat...few trades happened due to some selling pressure from mutual funds for specific (portfolio) requirements, apart from that nothing much happened," a dealer at a mid-sized brokerage firm said.

In the secondary market, mutual funds were active on both the buying and selling sides, dealing in papers maturing in shorter tenures, dealers said. A few private banks and a handful of insurance companies were also active in the market, trading longer tenure papers, dealers said. Trade volume improved in the secondary market with deals worth INR 68.93 billion being recorded on the National Stock Exchange and BSE combined, against INR 56.10 billion on Thursday. 

Papers issued by National Bank For Agriculture And Rural Development, Small Industries Development Bank of India, National Housing Bank, Great Eastern Shipping Co., State Bank of India, Power Finance Corp., Bharti Telecom, SMFG India Credit Co., and Shriram Finance, were traded the most on the exchanges.

In the primary market on Friday, LIC Housing Finance raised INR 10 billion through the reissuance of its bonds maturing on Oct. 18, 2029 at a yield of 7.65%. Shriram Finance also tapped the market on Friday to raise INR 1 billion through the reissuance of its bonds maturing on May. 4, 2026 at a yield of 8.95%.

Dealers said that the market participants are keeping a close eye on issuances lined up in the upcoming week. The primary market is expected to see more activity next week with several companies and financial institutions lined up to tap the market on Monday. 

Small Industries Development Bank of India plans to raise up to INR 50 billion on Monday through bonds maturing on Jun. 12, 2028. Indian Renewable Energy Development Agency will tap the bond market on Monday to raise up to INR 20 billion through bonds maturing in seven years. 

UltraTech Cement plans to raise INR 10 billion through bonds maturing in 10 years and has invited bids for the same Monday. Earlier this week, Informist exclusively reported that UltraTech Cement is likely to raise INR 10 billion through bonds maturing in 10 years on Monday or Tuesday with a T+1 allotment structure, citing sources in the know. Market participants expect the coupon for UltraTech Cement's 10-year bond issuance to range between 7.21% and 7.24%, Informist reported.

Century Joint Developments, ICICI Home Finance, Mindspace Business Parks REIT, Ashoka Buildcon, Utkarsh Small Finance Bank, Ecobox Industrials Asset, ARKA Fincap, Keertana Finserv, and Samunnati Financial Intermediation and Services will tap the market on Monday to raise funds through their bond issuances.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 32.50 million were traded at a weighted average yield of 7.1865-7.4720%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 30.00 million of Telangana's March 2027 bonds were traded at 7.4720%

* INR 2.50 million of Punjab's March 2028 bonds were traded at 7.1865%

End

Edited by Deepshikha Bhardwaj

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