India Corporate Bonds
Ylds steady, traders focus on primary market biddings
This story was originally published at 19:42 IST on 17 March 2025
Register to read our real-time news.Informist, Monday, Mar. 17, 2025
By Ashna Mariam George
MUMBAI – Yields on corporate bonds were steady in the secondary market on Monday, as all market participants remained focused on the issuances in the primary market, dealers said. Issuers raised over INR 112 billion from the primary market through their respective bond offerings.
In the primary market, REC raised INR 57.80 billion through the issuance of two bonds of different maturities. The company raised INR 30 billion through bonds maturing on Feb. 29, 2028, at a coupon of 7.44%. It also raised INR 27.80 billion through bonds maturing on Feb. 28, 2035, at a coupon of 7.32%.
State-owned Canara Bank tapped the market Monday with its first tier-II bond issuance in 2024-25 (Apr-Mar). The bank raised the whole quantum of INR 40 billion, through its Basel-III-compliant tier-II bonds maturing in 10 years at a coupon of 7.46%. According to market participants, the coupon for the issue was lower than expectations of 7.60%. "Since the supply of tier-II bonds are low, there would have been aggressive bidding," a fund manager at a mid-sized insurance company said.
Can Fin Homes also invited bids on Monday and raised INR 15.10 billion through its bonds maturing on May 18, 2027, at a coupon of 8.20%.
On Tuesday, NTPC plans to raise up to INR 40 billion through 15-year bonds. Market participants expect the issue to bag a coupon in the range of 7.30-7.40%. Bajaj Finance has also invited bids on Tuesday to raise up to INR 30 billion through the re-issuance of bonds maturing on Feb. 11, 2030. Tata Capital and NIIF Infrastructure Finance are also in line to tap the corporate bond market Tuesday.
Meanwhile, in the secondary market, there was buying from foreign investors and insurance companies in the shorter end of the curve. "FPIs (foreign portfolio investors) are taking position before major policy meetings, and insurance companies seem to have some inflows," a dealer at a mid-sized brokerage firm said. Banks and mutual funds were active on both buying and selling sides, dealers said.
Deals aggregating to INR 110.98 billion were recorded on the National Stock Exchange and BSE combined, against INR 134.38 billion on Thursday. Bonds issued by Larsen And Toubro, REC, Sammaan Capital, Telangana State Industrial Infrastructure Corp., NIIF Infrastructure Finance, National Bank For Agriculture And Rural Development, IIFL Samasta Finance, National Housing Bank, and HDB Financial Services, were traded the most on exchanges.
"Everyone is waiting for events like FOMC (US Federal Open Market Committee meeting) and policy rates decisions in global centres, so no one wants to take a risk, everyone is coming to the shorter end," the insurance company fund manager quoted above said. The monetary policy outcome of the US Federal Open Market Committee and the Bank of Japan are due Wednesday.
Market participants also took note of a correction in the yield curve, as they see a rise in long-term bond yields. "The curve is starting to normalise, when liquidity comes in, we can see the spread between g-secs (government securities) and corporate bonds narrow down. The spread in the three-year segment is very attractive and a lot of players are active in that segment," a fund manager at a mid-sized mutual fund house said. "There is lot of activity in the 2028 segment due to lot of primary (issuances) happening."
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 8.80 million were traded at a weighted average yield of 7.0625-7.2590%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Monday.
* INR 5.80 million of Tamil Nadu's Feb. 22, 2026 bonds were traded at 7.0625%
* INR 2.00 million of Uttar Pradesh's Jun. 2, 2030 bonds were traded at 7.2590%
* INR 1.00 million of Telangana's Mar. 7, 2031 bonds were traded at 7.2335%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Monday | Thursday |
Three-year | 7.53-7.55% | 7.55-7.57% |
Five-year | 7.47-7.50% | 7.48-7.51% |
10-year | 7.36-7.38% | 7.36-7.38% |
End
Edited by Akul Nishant Akhoury
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