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Informist, Thursday, Nov. 28, 2024

By Sachi Pandey

MUMBAI – Yields on corporate bonds were steady at the end of the session Thursday as activity in the secondary market remained limited due to a lack of fresh global and domestic cues, dealers said. Only mutual funds and banks were said to have been active due to requirement-based trading, while other market players kept to the sidelines, they said. While banks were mostly active on the selling side, mutual funds were active on both buying and selling sides.

"There's not much activity in the market today. In the last two-three days the market went up a little tracking US yields but today there was no activity, it's quite limited," a fund manager of fixed income at a large sized pension fund said. 

Deals worth INR 110 billion were recorded on the National Stock Exchange and BSE combined on Thursday, against INR 88.14 billion on Wednesday. Papers issued by National Bank For Agriculture And Rural Development, HDFC Bank, MSRDC Sea Link, LIC Housing Finance, Cholamandalam Investment And Fin. Co., Bharti Telecom, State Bank of India, were traded the most on the exchanges.

Market participants expect this steady momentum to continue for a few days. "Yields in corporate bonds have increased very slightly because of the liquidity conditions in the last few days, but now we hardly expect any movement, at least until policy (Reserve Bank of India's monetary policy meeting). GDP numbers will also not affect the market because the prices have already been factored in," a fund manager at a mid-sized mutual fund house said. 

On Wednesday, liquidity in the banking system was in deficit of INR 308.48 billion, against INR 364.18 billion on Tuesday.

India's Jul-Sept GDP data is due at 1600 IST on Friday. Dealers expect India's Jul-Sept GDP growth to fall to as low as 6.4%, against the Reserve Bank of India's forecast of 7%. This bolstered dealers' views on the onset of a rate cut cycle by the Monetary Policy Committee. The MPC will meet from Dec. 4-6, and the September quarter GDP reading will likely be the last significant data point before the meet, market experts said. 

On the primary market side, LIC Housing Finance raised INR 13.15 billion through bonds maturing on Oct. 22, 2027 at a coupon of 7.74%. PNB Housing Finance also tapped the bond market to raise INR 2.8 billion through bonds maturing in three years at a coupon of 8.15%. 

On Friday, Cholamanadalam Investment and Finance Co. has invited bids to raise funds up to INR 20 billion through bonds maturing in 10 years. NIIF Infrastructure Finance is also in queue to seek bids for bonds maturing on Dec. 5, 2030 and plans to raise up to INR 7.50 billion. Kotak Mahindra Prime, Muthoot Capital Services, Namdev Finvest, SMFG India Home Finance, Sundaram Home Finance, and Hinduja Leyland Finance are also in line to raise funds through their respective bond offerings. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 506.4 million were traded at a weighted average yield of 7.0987-7.1874%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 500.00 million of Haryana's June 2026 bonds were traded at 7.0987%

* INR 6.40 million of Uttar Pradesh's March 2031 bonds were traded at 7.1874%

End

Edited by Deepshikha Bhardwaj

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