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Informist, Friday, Apr. 11, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds in the secondary market ended the week on a steady note as market participants awaited economic data and events from the domestic and international fronts to take fresh positions, dealers said. "From a domestic perspective, the main thing the market is waiting for is the CPI data. Next cues are also based on what Trump (US President Donald Trump) will speak," a dealer at a mid-sized private sector bank said. 

India's CPI inflation data for March will be released on Tuesday at 1600 IST. According to an Informist poll of 11 economists, the headline retail inflation in March is seen unchanged from a month ago at 3.6%. 

Dealers also keenly await updates on tariffs and trade policies from the US. On Wednesday, Trump announced a 90-day pause on reciprocal tariffs imposed on its trading partners but raised tariffs on China to 125%. "Everything is intertwined, things will depend on the currency (dollar/rupee) movement and how the international situation will pan out," the dealer quoted above said. 

Market participants said foreign portfolio investors have sold government securities due to increasing geopolitical uncertainty and trade war and likely bought corporate bonds. "The spreads (between government securities and corporate bonds) have moved higher, so it makes sense for FPIs to sell G-secs and buy corporate bonds," a dealer at a mid-sized brokerage firm said. The yield spread between the 10-year benchmark government security and corporate bond increased to 49 basis points on Friday from 44 bps Wednesday.

While FPIs bought papers Friday, banks and mutual funds were active on the selling side, dealers said. Few banks and mutual funds also bought papers, they added. On Friday, deals aggregating INR 135.69 billion were recorded on the National Stock Exchange and the BSE combined, against INR 184.17 billion on Wednesday.

Bonds issued by National Bank For Agriculture And Rural Development, REC, National Bank For Financing Infrastructure And Development, Power Finance Corp., Bajaj Housing Finance, Apex Homes, LIC Housing Finance, Sammaan Capital, Bajaj Finance, Tata Capital Financial Services, and Bajaj Housing Finance, were traded the most on exchanges. 

Activity in the primary market of corporate bonds was moderate Friday, with only one major issue being recorded. Power Grid Corp. of India raised INR 60.00 billion through bonds maturing in 10 years at a coupon of 6.94%. The cut-off for the issue was largely in line with expectations, dealers said.

Money markets are shut on Monday on account of Babasaheb Ambedkar Jayanti. On Tuesday, National Bank for Agriculture and Rural Development invited bids to raise up to INR 70.00 billion through re-issuance of bonds maturing on Sept. 15, 2028. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 32.70 million were traded at a weighted average yield of 6.7370-6.8136%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Friday.

* INR 20.40 million of Haryana's Mar. 31, 2026; and Jun. 30, 2025 bonds were dealt at a weighted average yield of 6.7370%-6.7662%

* INR 7.50 million of Chhattisgarh's Mar. 28, 2031 bonds were dealt at a weighted average yield of 6.8136%

* INR 2.80 million of Tamil Nadu's Feb. 22, 2031 bonds were dealt at a weighted average yield of 6.8023%

* INR 2.00 million of Jharkhand's Mar. 30, 2031 bonds were dealt at a weighted average yield of 6.7752%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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