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Informist, Wednesday, May 14, 2025

By Ashna Mariam George

MUMBAI – Yields on corporate bonds fell 3-4 basis points in the secondary market Wednesday, tracking the movement in Indian government bond yields, dealers said. The yield on the benchmark 10-year 6.79%, 2034 government bond ended 4 bps down from the previous close due to lower-than-expected cut-off yields on Treasury bills and increased hopes of a rate cut.

"The market rallied (yields fell) across tenures with up to five year papers better (yields down) by 3-4 bps and those above by 2-3 bps, tracking the G-sec (government security) yields," a dealer at a mid-sized brokerage firm said. "Now that the tension between India and Pakistan is over, the market is taking new positions."

Expectations of a repo rate cut in June by the Reserve Bank of India's Monetary Policy Committee strengthened after CPI inflation for April came in at a 69-month low of 3.16%, dealers said. "CPI data is fairly benign, if the headline number continues to be softer and softer, then that gives enough of a leeway and a headroom for the central bank to act," a dealer at a mid-sized private sector bank said.

Market participants said they expect a 25 bps rate cut by the RBI in its June policy. "Absolutely there are further hopes of a 25 bps cut in June, also if the global scenario is fine, we see more rate cuts in the pipeline," a fund manager at a mid-sized insurance company said.

Investor confidence rose as the inflation print moderated and most participants were active in the secondary market, dealers said. While mutual funds were active on both buying and selling sides, insurance companies were mainly buyers and banks were mainly sellers, dealers said.

With increase in participation, volumes rose to INR 214.73 billion on the National Stock Exchange and the BSE combined, sharply higher from INR 135.16 billion on Tuesday. Papers issued by the Power Finance Corp., the National Bank for Agriculture and Rural Development, the Telangana State Industrial Infrastructure Corp., Edesia Constructions Ltd., Bajaj Finance, and Bajaj Housing Finance were traded the most on the exchanges.

In the primary market, Jio Credit Ltd., earlier called Jio Finance Ltd., raised INR 10 billion through three-year bonds maturing on Mar. 15, 2028 at a coupon of 7.19%. Sundaram Finance, Sundaram Home Finance, Embassy Office Parks REIT, and 360 ONE Prime Ltd. have invited bids on Thursday to raise funds through corporate bonds.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 515.80 million were traded at a weighted average yield of 7.4800-7.5016%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Wednesday.

* INR 500 million of Rajasthan's Mar. 15, 2026, bonds were dealt at a weighted average yield of 7.4800%

* INR 8 million of Uttar Pradesh's Mar. 10, 2028, bonds were dealt at a weighted average yield of 7.4997%

* INR 3 million of Telangana's Mar. 7, 2029, bonds were dealt at a weighted average yield of 7.4998%

* INR 4 million of Tamil Nadu's Feb. 22, 2030 and Feb. 22, 2032 bonds were dealt at weighted average yields of 7.4998-7.5016%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Ashish Shirke

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