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Informist, Monday, Mar. 24, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds in the secondary market ended steady on Monday amid moderate trading activity ahead of the financial year-end, dealers said. "There was not enough activity today (Monday), it was in a leisurely mode... everyone has already made necessary portfolio trading and is ready to close the books," a dealer at a mid-sized brokerage firm said.

Yields had slipped over 10 basis points across tenures last week due to demand from investors to deploy funds ahead of the financial year-end. According to market participants, investors have taken positions ahead of the Reserve Bank of India's Monetary Policy Committee meeting scheduled for early April, and are now in a wait-and-watch mode. "Last week there was a lot of buying on expectations of a rate cut in April," a fund manager at a mid-sized insurance company said. The RBI's MPC is widely expected to cut the repo rate by 25 basis points to 6.00% in its next meeting.  

Market experts expect the central bank to take measures to infuse liquidity in the banking system in its April policy meeting. "The only way that a rate cut cycle helps is if the RBI also ensures that there is surplus or ample liquidity to ensure that the benefit of rate (cuts) come to the system," a dealer at a mid-sized public sector bank said.

The net liquidity injected by the RBI, a proxy for liquidity deficit, was INR 2.61 trillion on Saturday, the highest since Jan. 27. The central bank will buy gilts worth INR 500 billion on Tuesday through an open market operation auction. On Monday, the RBI conducted a $10 billion dollar/rupee buy/sell swap auction.

In the secondary market on Monday, deals aggregating INR 165.63 billion were recorded on the National Stock Exchange and BSE combined, against INR 214.09 billion on Friday. Only mutual funds were active on the selling side and banks and foreign portfolio investors were active on the buying side, dealers said.

Bonds issued by REC, Housing and Urban Development Corp., HDFC Bank, Power Finance Corp., Telangana State Industrial Infrastructure Corp., National Bank for Agriculture and Rural Development, Bajaj Finance, Bharti Telecom, Kerala Infrastructure Investment Fund Board, NTPC, Mahindra and Mahindra Financial Services and Vivriti Capital were traded the most on exchanges.

The primary market activity also remained dull on Monday with no major issuer tapping the bond market to raise funds. However, Tuesday is a busy day for the primary bond market with marquee issuers, including Export-Import Bank of India and Housing and Urban Development Corp., in line to raise funds through bond offerings. 

Export-Import Bank of India has invited bids for Jun. 30, 2030 bonds to raise up to INR 25 billion, while Housing and Urban Development Corp. has sought bids to raise up to INR 20 billion through bonds maturing on Mar. 27, 2035. Indian Renewable Energy Development Agency will also tap the market Tuesday to raise up to INR 10 billion through tier-II bonds maturing in 10 years.

Cholamandalam Investment and Finance Co., IKF Finance, and Trust Investment Advisors will also raise funds on Tuesday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 301.50 million were traded at a weighted average yield of 7.1106-8.4694%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Monday.

* INR 104.00 million of Tamil Nadu's Feb. 22, 2027, Feb. 22, 2030, and Feb. 22, 2031 bonds were traded at 7.1164-8.4694%

* INR 100.00 million of Rajasthan's Mar. 15, 2026 bonds were traded at 7.1835%

* INR 92.00 million of Haryana's Mar. 31, 2026 bonds were traded at 7.1645%

* INR 5.50 million of Uttar Pradesh's Mar. 21, 2027 and Mar. 21, 2029 bonds were traded at 7.1106-8.3874%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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