India Corporate Bonds
Yields steady on lack of fresh cues; volumes down
This story was originally published at 20:11 IST on 24 December 2024
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds in the secondary market ended steady on Tuesday due to lack of fresh domestic and global triggers, dealers said. "The market was little dull today (Tuesday) as most traders were on leave ahead of the Christmas holiday, therefore, we witnessed volumes were also slightly lower compared to the previous day (Monday)... and there is no event as such to guide the market," a dealer at a mid-sized mutual fund house said.
Trade volume in the secondary market fell slightly Tuesday. Deals aggregating to only INR 72.68 billion were recorded on the National Stock Exchange and BSE combined, compared with INR 87.59 billion on Monday. Banks and mutual funds were seen active on both buying and selling sides, dealing in papers maturing in short-tenures, dealers said.
A handful of insurance companies were also seen buying and selling in papers below the five-year segment, dealers said. "There was hardly any significant activity apart from the usual requirement-based trading which could make any impact on yield levels," a dealer at a mid-sized brokerage firm said.
Papers issued by REC, Power Finance Corp., Punjab & Sind Bank, ICICI Prudential Life Insurance Co., Housing And Urban Development Corp., and HDB Financial Services were traded the most on exchanges on Tuesday.
Market participants expect current yields in the secondary market to hold steady, unless some significant event takes place. "The current market dynamics are stable, with balanced demand and supply keeping the market in confined range," said the dealer quoted above.
On Tuesday, the corporate bond primary market remained slightly dull. State-owned entity Indian Railway Finance Corp. raised INR 28.40 billion through bonds maturing in 10 years at a coupon of 7.15%.
According to the bid book accessed by Informist, the issue garnered 46 bids aggregating to INR 56.40 billion in the coupon range of 7.06-7.24%. "IRFC's 10-year bond cut-off was in line with what market participants had expected," a dealer at a mid-sized brokerage firm said. "We were expecting it to be around 7.14-7.15% level."
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 22.20 million were traded at a weighted average yield of 7.0802-7.1489%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.
* INR 8.70 million of Tamil Nadu's Feb. 22, 2026 bonds were traded at 7.1489%
* INR 13.50 million of Haryana's March 2025 and March 2026 bonds were traded at 7.0802-7.1491%
BENCHMARK LEVELS FOR CORPORATE BONDS:
TENURE | TUESDAY | MONDAY |
Three-year | 7.58-7.60% | 7.58-7.60% |
Five-year | 7.47-7.50% | 7.48-7.50% |
10-year | 7.23-7.25% | 7.25-7.27% |
End
Edited by Akul Nishant Akhoury
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