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Informist, Friday, Feb. 21, 2025

By Ashna Mariam George 

MUMBAI – Yields in the secondary market of corporate bonds wrapped up the week on a steady note, as there were no fresh global or domestic triggers to influence levels, dealers said. "There wasn't any trigger for the market to take a call and there aren't any triggers in sight...and being weekend also, participation was less...market was almost lacklustre with same levels as yesterday's (Thursday)", a dealer at a mid-sized brokerage firm said. 

The secondary market of corporate bonds on Friday saw deals aggregating to INR 99.81 billion being recorded on the National Stock Exchange and BSE combined, compared with INR 118.54 billion on Thursday. A handful of mutual funds and banks were active on the buying and selling sides, dealing in shorter tenure papers, dealers said. Activity in the longer-end of the curve was dull, they said.

Papers issued by REC, SBM Bank (India), Hyderabad Jabilli Properties, LIC Housing Finance, Cholamandalam Investment And Finance Co., Power Finance Corp., Sammaan Capital, Telangana State Industrial Infrastructure Corp., National Bank For Agriculture And Rural Development, Bank of Maharashtra, IIFL Finance, HDB Financial Services, and THDC India were traded the most on the exchanges.

Market participants expects the rates to remain in a narrow range and awaits some action from the central bank on the liquidity front. "There are no major triggers before Feb. 28...everyone is waiting for some lineancy from the RBI (Reserve Bank of India) to get funds" a fixed income fund manager at a mid-sized insurance company said. "Liquidity is going to be tight in March with advance tax outflows...RBI in its last policy said it will be vigilant of the liquidity conditions in the system and act according to it...so we expect another round of OMO (open market operation) in March for atleast 50,000 crores (INR 500 billion)."

Although the RBI has undertaken liquidity addressing measures such as bond purchases under open market operations and daily variable rate repo auctions, it still remains a concern for market participants.

On Thursday, the RBI bought INR 40.91 billion of the 6.79%, 2034 gilt through open market operation and set the cut-off price at INR 100.72 against INR 100.80 in an Informist poll.

Activity in the primary market of corporate bonds remained relatively dull on Friday. On Monday, Indian Renewable Energy Development Agency has invited bids to raise up to INR 15 billion through bonds maturing in 11 years. Market participants expect the issue to bag a coupon in the range of 7.25%-7.30%. 

"The coupon for the issue will depend on the availability of funds with insurance companies...funds are almost dried up and everything will depend on the liquidity," the fund manager quoted above said. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 127.50 million were traded at a weighted average yield of 6.8123-7.2348%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Friday.

* INR 75.00 million of Telangana's Mar. 7, 2030 and Mar. 7, 2028 bonds were traded at 7.1880-7.1910% 

* INR 31.50 million of Rajasthan's Jun. 23, 2026 and Mar. 31, 2026 bonds were traded at 7.1033-7.2348% 

* INR 11.60 million of Uttar Pradesh's Jun. 2, 2028 and Mar. 21, 2029 bonds were traded at 6.8123-7.1938%

* INR 9.40 million of Chhattisgarh's Mar. 28, 2029 bonds were traded at 7.1900%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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