More Stories

Informist, Friday, May 16, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds fell in the secondary market Friday for the fourth consecutive day, tracking the government bond yields, dealers said. Yields on papers with maturity up to five years fell by 5-7 basis points and yields on 10-year papers fell by 3-4 bps, dealers said. 

During the day, yield on the benchmark 10-year 6.79%, 2034 government bonds moved down by 2 bps as cut-off prices at the gilt auction were largely in line with expectations. It ended at 6.27%, largely unchanged from Thursday. There was firm demand for the 6.79%, 2031 gilt in the auction as market participants wanted to buy it at lucrative levels due to hopes of further rate cuts, dealers said. 

A rush from investors to buy papers in anticipation of a 25-basis-point rate cut by the Reserve Bank of India's Monetary Policy Committee in June also brought down the yields Friday, dealers said. "There are no negative tensions in the market as such. Participants are refilling their portfolio which were sold during the India-Pakistan tension," a dealer at a large pension fund said. "They want to build their portfolio before the rate cut."

While foreign portfolio investors were the major buyers Friday, banks and mutual funds were on the selling side, dealers said. Deals aggregating INR 165.34 billion were recorded on the National Stock Exchange and the BSE combined, sharply lower than INR 204.51 billion reported Thursday. Papers issued by National Bank For Agriculture And Rural Development, Small Industries Development Bank of India, Hindustan Petroleum Corp., and Telangana State Industrial Infrastructure Corp. were traded the most on the exchanges.

In the primary market, the Indian Railway Finance Corp. raised INR 30 billion through bonds maturing in five years at a coupon of 6.65%. Market participants said the cut-off on the issue was lower than the expected level of 6.70-6.74%, due to high demand in expectation of rate cut. Papers with maturity up to five years are the first ones to react to a rate cut and always in demand ahead of a rate cut, dealers said. 

On Monday, PNB Housing Finance will tap the market to raise INR 4 billion through a five-year bond. Kogta Financial (India) Ltd. has also invited bids Monday to raise INR 1.50 billion through bonds maturing on Mar. 10, 2028. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 45.50 million were traded at a weighted average yield of 6.0497-6.6894%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Friday.

* INR 25.50 million of Rajasthan's Mar. 15, 2026, Mar. 31, 2026, and Jun. 23, 2026 bonds were dealt at a weighted average yield of 6.0497-6.4680%

* INR 7.50 million of Chhattisgarh's Mar. 28, 2031 bonds were dealt at a weighted average yield of 6.6894%

* INR 5.00 million of Uttar Pradesh's Jun. 2, 2027 bonds were dealt at a weighted average yield of 6.3300%

* INR 2.80 million of Tamil Nadu's Feb. 22, 2031 bonds were dealt at weighted average yields of 6.5734%

* INR 2.70 million of Haryana's Jun. 30, 2025 bonds were dealt at weighted average yields of 6.1141%

* INR 2.00 million of Jharkhand's Mar. 30, 2031 bonds were dealt at weighted average yields of 6.5819%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.