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Informist, Tuesday, Apr. 8, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds ended steady in the secondary market on Tuesday as market participants were in a wait-and-watch mode ahead of the outcome of the Reserve Bank of India's Monetary Policy Committee meeting on Wednesday, dealers said. "Activity was slightly weaker today (Tuesday), as everyone was cautious ahead of the policy outcome," a dealer at a mid-sized brokerage firm said. "Volume was also subdued compared to last few days."

RBI Governor Sanjay Malhotra will announce the MPC's decision at 1000 IST on Wednesday. According to a poll of 15 economists by Informist, the MPC is expected to lower the repo rate by 25 basis points to 6.00%. Some sections of the market also expect the committee to change its stance to 'accommodative' from 'neutral'.

"If the rate cut doesn't happen, G-sec (government security) yields would rise probably and similarly, corporate bonds," a dealer at another mid-sized brokerage firm said. "All institutions have done over-eating, as in they have bought papers in expectation of a rate cut."

The cautious approach of market participants kept the trade volume lower in the secondary market, with deals aggregating to INR 129.73 billion being recorded on the National Stock Exchange and the BSE combined, down from INR 146.29 billion on Monday. Banks and mutual funds were active on both the buying and selling sides across tenures, while insurance companies sold papers in the longer tenure, dealers said.

Bonds issued by Larsen and Toubro, REC, Mancherial Repallewada Road, Power Finance Corp., National Bank for Agriculture and Rural Development, Sammaan Capital, Bajaj Housing Finance, Small Industries Development Bank of India, and Shriram Finance were among the most traded on exchanges.

The primary market saw decent activity on Tuesday, with companies tapping the market to raise funds. Public sector entity REC raised INR 26.25 billion through bonds maturing on Apr. 11, 2040 at a coupon of 7.02%. Shriram Finance raised INR 17.15 billion through two bonds of different maturities, and LIC Housing Finance raised INR 10.00 billion through the reissuance of its bonds maturing on Feb. 21, 2030. 

A few non-banking finance companies are in line to raise funds through the primary market on Wednesday. Axis Finance plans to raise up to INR 14.00 billion through two bonds of different maturities. HDB Financial Services has invited bids to raise up to INR 20 billion through two bonds of varying maturities. Indel Money, Ambium Finserve, and Hinduja Leyland Finance will also tap the market on Wednesday to raise funds through their bond offerings.

Market participants expect issuances in the primary market to pick up after the outcome of the MPC meeting. 

UDAY BONDS

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market on Tuesday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Avishek Dutta

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