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Informist, Wednesday, Apr. 16, 2025

By Ashna Mariam George

MUMBAI – Secondary market yields on corporate bonds maturing in three and five years fell by 4-7 basis points and 10-year paper declined 2-3 bps on Wednesday as mutual funds aggressively bought papers, dealers said. "Mutual funds are cash-rich, and a lot of the short holding papers (short-term papers held by mutual funds) got matured," a dealer at a mid-sized brokerage firm said.

Foreign portfolio investors also likely bought corporate bonds, pushing down yields, market participants said. "Across the market, there are rumours about FPI buying... because right now there is uncertainty in the US market due to tariff issues going on and the dollar index has gone down drastically, so funds are being invested in the Indian market," a fund manager at a mid-sized mutual fund house said. At 1740 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.58, down from 100.10 Tuesday and 99.64 Monday. 

The corporate bond market also tracked yields on government securities, which fell by 3-7 bps, market participants said. "Corporate bonds have rallied (yields fell) similarly to g-secs (government securities), day-on-day, around 6 bps yield has cooled off in g-secs and corporate bonds, so the spread (between government bonds and corporate bonds) is the same," the fund manager quoted above said.

Yields on government bonds fell as foreign portfolio investors bought papers on increased bets of further rate cuts by the Reserve Bank of India. Yield on 5-year benchmark government security ended 7 bps down at 6.12%, while that on the 10-year bond ended nearly 3 bps down at 6.39%. 

While some mutual funds bought papers, few others, including banks, were on the selling side, dealers said. Increased buying led to improved trade volume in the secondary market Wednesday. Deals aggregating INR 176.50 billion were recorded on the National Stock Exchange and BSE combined, nearly double the INR 99.74 billion reported Tuesday. 

Papers issued by REC, HDFC Bank, Indian Railways Finance Corp., Mancherial Repallewada Road, Power Finance Corp., National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, and National Housing Bank were the most traded on the exchanges. 

Issuance in the primary market was moderate Wednesday with only one major issue during the day. Non-banking financier Bajaj Finance raised INR 5 billion through near three-year bonds maturing Jun. 26, 2028, at a coupon of 7.3763%.

Poonawalla Fincorp has invited bids Thursday to raise up to INR 18.75 billion through two-year and three-year bonds.  Altius Telecom Infrastructure Trust will also tap the market Thursday to raise INR 12 billion through 10-year bonds maturing in April 2035.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 332.40 million were traded at a weighted average yield of 6.4652-6.9274%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Wednesday.

* INR 310.4 million of Rajasthan's Mar. 15, 2026  and Mar. 31, 2026 bonds were dealt at a weighted average yield of 6.4652%-6.8600%

Chhattisgarh 

* INR 15.0 million of Chhattisgarh's Mar. 28, 2029 bonds were dealt at a weighted average yield of 6.8200%

* INR 4.0 million of Tamil Nadu's Feb. 22, 2027 bonds were dealt at a weighted average yield of 6.7974%

* INR 3.0 million of Haryana's Mar. 31, 2026 bonds were dealt at a weighted average yield of 6.9275%

BENCHMARK LEVELS FOR CORPORATE BONDS:

Filed by Saji George Titus

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