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Informist, Tuesday, May 27, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds were little changed in the secondary market Tuesday due to lack of fresh domestic triggers, dealers said. Market participants continued to position for a 25-basis-point rate cut in the Reserve Bank of India's Monetary Policy Committee meeting in June, dealers said. 

"As of now, since policy is there market is going to be around current levels (yields)...25 bps rate cut is already priced in and some section of the market expects an extreme of 50 bps (rate cut)," a fund manager at a mid-sized mutual fund house said. Market participants said investors have already bought papers in anticipation of a rate cut. A lot of buying had already happened in the previous weeks, and now demand has cooled down, a fixed-income associate at a mid-sized brokerage firm said. 

Traders also await India's GDP growth estimates for Jan-Mar and 2024-25 (Apr-Mar) due Friday. According to an Informist poll of 19 economists, India's GDP growth is seen rising to a four-quarter high of 6.8% in Jan-Mar from 6.2% in the previous quarter. The statistics ministry will release GDP data for Jan-Mar and FY25 at 1600 IST on May 30. Market participants said they expect growth to be on the lower side and have priced in as low as 6.5%. 

In the secondary market, deals aggregating INR 148.84 billion were recorded on the National Stock Exchange and the BSE combined, up from INR 134.81 billion reported Monday. Mutual funds were active on both buying and selling sides, while other participants such as banks and pension funds remained on the sidelines, dealers said. 

Most traded papers Tuesday were those issued by the REC, the Power Finance Corp., the National Bank For Agriculture And Rural Development, the Telangana State Industrial Infrastructure Corp., State Bank of India, and LIC Housing Finance. 

In the primary market, Cholamandalam Investment and Finance Co., 360 ONE Prime, and Poonawalla Fincorp were the major issuers Tuesday. On Wednesday, the NABARD will tap the market to raise INR 70 billion through the reissuance of bonds maturing on Sept. 15, 2028. Market participants expect the issue to sell at a coupon of 6.59-6.61%. The last time the issuer tapped the market was on Apr. 15, when it raised INR 70 billion through reissuance of this same bond at 7% yield. The yield on the three-year benchmark NABARD paper was 7.02-7.04% on Apr. 15. 

Another state-owned entitity, Indian Railway Finance Corp. has invited bids to raise up to INR 60 billion through two bonds. The company plans to raise INR 30 billion each through a three-year bond and a five-year bond.  LIC Housing Finance, Sundaram Finance, and Can Fin Homes will also raise funds from market Wednesday. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 3 million were traded at a weighted average yield of 6.7545-6.8466%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Tuesday.

* INR 2 million of TamilNadu's Feb. 22, 2030 bonds and Feb. 22, 2032 were dealt at a weighted average yield of 6.7545-6.8210%

* INR 1 million of Uttar Pradesh's Mar. 10, 2029 bonds and Mar. 29, 2030 bonds were dealt at a weighted average yield of 6.7817-6.8466%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Akul Nishant Akhoury

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