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Informist, Thursday, Feb. 13, 2025

By Ashna Mariam George

MUMBAI – Yields on corporate bonds ended steady in the secondary market Thursday, as there were no fresh global or domestic triggers, dealers said. "The secondary market was flattish with moderate (trade) volumes," a dealer at a mid-sized brokerage firm said. "We are now looking into the global market for cues if any."

Deals aggregating to INR 86.65 billion were recorded on the National Stock Exchange and BSE combined on Thursday, as compared to INR 64.89 billion on Wednesday. Mutual funds were active on both buying and selling side while banks were on the selling side across tenures, dealers said. Insurance companies and pension funds bought longer-tenure papers, they added.

Papers issued by Larsen and Toubro, REC, Mangalore Refinery and Petrochemicals, LIC Housing Finance, Power Finance Corp., Telangana State Industrial Infrastructure Corp., National Bank for Agriculture and Rural Development, EAAA India Alternatives, Small Industries Development Bank of India, and Mahindra and Mahindra Financial Services were traded the most on exchanges.

Continued liquidity deficit also remains an issue for market participants, holding them back from taking fresh positions. "Liquidity is still a problem...March is going to be tight again with advance tax (outflows) and roll-over of the financial year," a dealer at another mid-sized brokerage firm said. "It would subside by March end or early April." On Wednesday, the net liquidity injected by the Reserve Bank of India--a proxy for the systemic liquidity deficit--rose to INR 2.07 trillion against INR 1.91 trillion on Tuesday.

In the primary market, Punjab National Bank raised INR 29.50 billion through infrastructure bond maturing in 10 years at a coupon of 7.34%. However, the cut-off for the issue was 17 basis points higher than the issuer's expectations, sources said.

"There was demand, but the issuer was not comfortable to give at higher levels," one of the dealers quoted above said. "They got the whole amount at 7.39% but they accepted only near the base size, so that they can issue at lower levels." According to the bid book accessed by Informist, the issue garnered 82 bids aggregating INR 84.05 billion in the range of 7.19-7.95%.

HDFC Life Insurance Co. also tapped the market on Thursday and raised INR 10 billion through bonds maturing in 10 years at a fixed coupon of 8.10%.

Issuances to the tune of INR 77 billion from state-backed entities, banks, and private sector companies are lined up Friday. Bank of India plans to raise up to INR 50 billion through 10-year infrastructure bonds. Market participants expect the coupon to be in the 7.35-7.40% range.

Kerala Infrastructure Investment Fund Board will tap the market to raise up to INR 14.9996 billion through reissuance of staggered redemption bonds. THDC India has also invited bids on Friday to raise up to INR 7 billion through 10-year bonds. HDB Financial Services plans to raise up to INR 5 billion through April 2027 bonds.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 1.17 billion were traded at a weighted average yield of 6.75-7.22%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Thursday.

* INR 1.16 billion of Haryana's Mar. 31, 2026 bonds were traded at 6.75%

* INR 5.00 million of Telangana's Mar. 22, 2026 bonds were traded at 7.16% 

* INR 3.00 million of Tamil Nadu's Feb. 22, 2032 bonds were traded at 7.22% 

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Ashish Shirke

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