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Informist, Tuesday, Apr. 29, 2025

By Ashna Mariam George

MUMBAI – Corporate bond yields ended 2-3 basis points lower across tenures Tuesday following the Reserve Bank of India's open market operation auction announcement, dealers said. The RBI on Monday said it will purchase government securities worth INR 1.25 trillion through four separate open market operation auctions in May. In April, the RBI has bought gilts amounting to INR 1.20 trillion.

During the day, yields rose after news reports of escalation in India-Pakistan tension, dealers said. "Uncertainity still prevails, but levels were down due to a certain extent because of OMO announcement," a dealer at a mid-sized brokerage firm said. According to media reports, Pakistan army shot down an Indian quad-copter along the Line of Control in Jammu & Kashmir. 

As a reaction to the reports, yields on government securities rose during the day. However, the yield on the benchmark 10-year 6.79%, 2034 government bond ended at 6.34%, lower than the 6.40% on Monday, as cut-offs at both the state bond auction and the open market operation auction were better than expected.

In the secondary market of corporate bonds, deals aggregating INR 161.31 billion were recorded on the National Stock Exchange and the BSE combined, up from INR 138.36 billion on Monday. Only mutual funds were active in the market, and other participants such as banks, insurance companies, and pension funds remained on the sidelines, dealers said.

Papers issued by the REC, the Small Industries Development Bank of India, the National Housing Bank, the National Bank For Agriculture And Rural Development, the Telangana State Industrial Infrastructure Corp., HDFC Bank, and State Bank of India were most traded on the exchanges. 

The primary market was active Tuesday with two major issuances during the day. Nexus Select Trust raised INR 5.50 billion through seven-year bonds maturing on Apr. 30, 2032, at a coupon of 7.19%. Muthoot Finance also tapped the market Tuesday and raised INR 6.75 billion through five-year bonds at 8.20% coupon. 

Wednesday, Power Finance Corp. has invited bids to raise up to INR 65 billion through two bonds of different maturities. The company plans to raise up to INR 25 billion through 15-year bonds maturing on Apr. 16, 2040, and up to INR 35 billion through bonds near 10-year bonds maturing on Jun. 2, 2035. Market participants expect primary market issuances to rise in the coming weeks.

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 Deepshikha Bhardwaj

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