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Informist, Tuesday, May 6, 2025

By Ashna Mariam George

MUMBAI – Secondary market yields on three-year corporate bonds rose Tuesday on fears of a potential rise in tensions between India and Pakistan, dealers said. "Levels were up by 2-3 bps... there is selling pressure in tenures up to three years," a dealer at a mid-sized broking firm said. 

Yields on bonds maturing in five years and 10 years were largely steady owing to lack of demand, dealers said. Bonds maturing in three years are the most actively traded papers.

Market participants panicked after India's home ministry asked states to conduct mock civilian drills to prepare for any attacks. The directive came amid rising tensions with Pakistan following the Apr. 22 terrorist attack at Pahalgam in which 26 people were killed. "The market was overall weak and uncertain and there is war assumption," a dealer at another mid-sized brokerage said.

Market participants said they await further cues in the matter to take fresh positions. "Till there are clear signs, maybe comments from both sides that we have resolved the matter to whatever satisfaction, till then I think (prices) might continue to underperform," a dealer at a mid-sized private-sector bank said. 

In the secondary market, deals aggregating to INR 144.03 billion were recorded on the National Stock Exchange and the BSE combined, higher than INR 121.18 billion reported Monday. While banks and insurance companies sold bonds, mutual funds were on the buying side, dealers said. Papers issued by the National Bank for Agriculture and Rural Development, The Export-Import Bank of India, REC Ltd., Telangana State Industrial Infrastructure Corp., HDFC Bank, and LIC Housing Finance were traded the most on exchanges. 

The primary market did not see any major issuances Tuesday. However, Wednesday is packed with issuances worth over INR 88 billion from state-owned entities and private companies.

Public-sector entity NTPC has invited bids Wednesday to raise up to INR 40 billion through 10-year bonds. Another state-owned entity, The Export-Import Bank of India, will also tap the market Wednesday to raise up to INR 25 billion through bonds maturing in 10 years. Market participants expect the issuances to sail through at a coupon of 6.88-6.93%.

The Kerala Infrastructure Investment Fund Board, Piramal Enterprises Ltd., Piramal Capital & Housing Finance, and Shriram Finance Ltd. are also in line to raise funds from the corporate bond market Wednesday.

UDAY BONDS

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

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Rajeev Pai

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