India Corporate Bonds
Lack of firm domestic cues keeps yields steady
This story was originally published at 20:54 IST on 24 April 2025
Register to read our real-time news.Informist, Thursday, Apr. 24, 2025
By Ashna Mariam George
MUMBAI – Yields on corporate bonds were little changed in the secondary market on Thursday due to lack of fresh domestic triggers, dealers said. "The overall activity was slow and there wasn't any big buying or selling," a dealer at a mid-sized brokerage firm said.
However, yields fell slightly during the day due to a fall in yields on government securities, but later reversed the fall, tracking the movement in government bond yields, dealers said. The yield on the benchmark 10-year 6.79%, 2034 government bond ended at 6.32%, 1 basis point lower than on Wednesday.
"G-secs (government securities) rallied in the last few hours, probably because of short-covering ahead of the auction tomorrow (Friday), and maybe OMO (open market operations) rumours in May," a fund manager at a mid-sized mutual fund house said. "The rally was mainly in G-secs. If the levels remain the same tomorrow, we can see a rally tomorrow in corporate bonds."
Market participants said some traders partially covered the short positions they had taken earlier ahead of the gilt auction on Friday. The Reserve Bank of India will on Friday sell INR 150 billion of the 6.75%, 2029 bond and INR 120 billion of the 7.09%, 2054 bond.
In the secondary market, deals aggregating INR 120.34 billion were recorded on the National Stock Exchange and BSE combined, higher than INR 113.07 billion reported on Wednesday. While mutual funds were active on both the buying and selling sides, banks, insurance companies and pension funds remained on the sidelines, dealers said.
Bonds issued by the Telangana State Industrial Infrastructure Corp., the Indian Renewable Energy Development Agency, the National Bank for Agriculture and Rural Development, the Small Industries Development Bank of India, and HDFC Bank were the most traded on exchanges.
Primary market issuance was moderate on Thursday, with only one notable issue. The Indian Railway Finance Corp. raised INR 30 billion through five-year bonds maturing on Apr. 30, 2030 at a coupon of 6.78%. Market participants said the coupon was largely in line with expectations.
UDAY BONDS
None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market Thursday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | THURSDAY | WEDNESDAY |
Three-year | 6.89-6.91% | 6.88-6.91% |
Five-year | 6.87-6.89% | 6.86-6.89% |
10-year | 6.94-6.96% | 6.93-6.95% |
End
Edited by Avishek Dutta and Ashish Shirke
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