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Informist, Friday, May 23, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds in the secondary market fell slightly Friday as investors bought papers ahead of the Reserve Bank of India's surplus transfer to the central government, dealers said. Yields went down by around 2 basis points across tenures, dealers said. 

After market hours Friday, the RBI said it will transfer a record INR 2.69 trillion as surplus to the government for 2024-25 (Apr-Mar). This was slightly below the INR 3 trillion expected by market participants, but higher than the then-record INR-2.11-trillion surplus given last year. "The market will (Monday) open slightly up in terms of yield...there will be around a 4-5 bps movement," a fund manager at a mid-sized mutual fund house said. 

Though a few participants bought papers, most remained cautious during the day ahead of the dividend announcement, dealers said. "Everyone was in a cautious mode, yields did not move like they moved on Monday and Tuesday," a dealer at a mid-sized brokerage firm said. "There was little buying, but not as much as in the past few days." Yields had fallen about 20-30 bps in almost over a week. 

Deals aggregating INR 109.18 billion were recorded on the National Stock Exchange and the BSE combined, down from INR 160.96 billion reported Thursday. While a couple of foreign investors bought bonds, banks and mutual funds were active on both buying and selling sides, dealers said. 

Most traded papers Friday were those issued by the Indian Railway Finance Corp., the Telangana State Industrial Infrastructure Corp., the Small Industries Development Bank of India, Tata Capital Housing Finance, and LIC Housing Finance. 

In the primary market, Aditya Birla Capital, HDB Financial Services and Bajaj Housing Finance were the major issuers Friday. On Monday, L&T Finance will tap the market to raise INR 15 billion through two bonds. Sundaram Home Finance has also invited bids Monday to raise INR 2.50 billion through bonds maturing in five years. 

Kotak Infrastructure Debt Fund, Ambit Finvest Pvt. Ltd., and Midland Microfin Ltd. will also raise funds from the primary market Monday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 78.50 million were traded at a weighted average yield of 6.7917-6.7922%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Friday.

* INR 45.00 million of TamilNadu's Feb. 22, 2030 bonds were dealt at a weighted average yield of 6.7922%

* INR 33.50 million of Telangana's Mar. 7, 2031 bonds were dealt at a weighted average yield of 6.7917%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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