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Informist, Thursday, Feb. 6, 2025

By Ashna Mariam George 

MUMBAI – The corporate bond market saw a busy Thursday as investors aggressively bought papers as they widely expect the Monetary Policy Committee to cut the policy repo rate by 25 basis points to 6.25% on Friday, dealers said. Yields on corporate bonds fell by around 2-3 basis points across tenures, they said. 

"The levels were better than yesterday's (Wednesday) and there is buying happening as most of the players are positioning themselves ahead of the MPC (to lock in yields)," a fund manager at a mid-sized mutual fund house said. On Wednesday, the yields on papers maturing in three to five years fell by 5-7 basis points as participants factored in the rate cut. 

In the secondary market on Thursday, deals aggregating to INR 121.85 billion were recorded on the National Stock Exchange and BSE combined, against INR 140.86 billion on Wednesday. While mutual funds, foreign banks, and pension funds were on the buying side, Indian banks were on the selling side, with activity spread across tenures, dealers said.

Papers issued by REC, Silverline Investment And Finance, LIC Housing Finance, Cholamandalam Investment And Finance Co., Telangana State Industrial Infrastructure Corp., National Bank For Agriculture And Rural Development, Muthoot Finance, Can Fin Homes, Export Import Bank of India, Small Industries Development Bank of India, National Housing Bank, and Mahindra and Mahindra Financial Services were traded the most on exchanges.

In the primary market on Thursday, Tata Projects raised INR 5 billion through a bond maturing on Feb. 7, 2031, at a fixed coupon of 8.60%. Market participants expect plenty of primary issuers to tap the corporate bond market after the monetary policy outcome on Friday. A handful of public sector entities are already in line to raise funds next week through their respective bond offerings. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 125.50 million were traded at a weighted average yield of 6.6171-7.3492%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed on Thursday.

* INR 106.90 million of Rajasthan's March 2025 bonds were traded at 6.6171%-7.3492%

* INR 12.00 million of Madhya Pradesh's March 2030 bonds were traded at 7.0844% 

* INR 6.60 million of Uttar Pradesh's June 2028 bonds were traded at 6.8600% 

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Akul Nishant Akhoury

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