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Informist, Thursday, May 29, 2025

By Ashna Mariam George 

MUMBAI – Yields on corporate bonds ended steady in the secondary market Thursday as market participants refrained from placing huge bets ahead of India GDP data for Jan-Mar on Friday, dealers said. "The market was quite rangebound and everyone has positioned ahead of the GDP data," a fixed-income dealer at a large pension fund said. 

According to an Informist poll, India's GDP growth is seen rising to a four-quarter high of 6.8% in Jan-Mar from 6.2% a quarter ago. The statistics ministry will release GDP data for Jan-Mar and FY25 at 1600 IST Friday.

The GDP data will give further direction to the market. "If the numbers are closer to 6%, then we might see a rally in prices... if it is towards the higher side, we can see some sell-off," the dealer said. "If it is in the downward trajectory, it will give the RBI (Reserve Bank of India) more room to cut rates." The market has priced in a 25-basis-point rate cut in the Monetary Policy Committee meeting, which will end on Jun 6. 

In the secondary market, deals aggregating INR 183.49 billion were recorded on the National Stock Exchange and the BSE combined, sharply up from INR 136.00 billion reported Wednesday. Mutual funds were active on both buying and selling sides, while insurance companies and a couple of banks bought papers, dealers said.

Papers issued by the National Bank for Agriculture and Rural Development, Small Industries Development Bank of India, Power Finance Corp., Telangana State Industrial Infrastructure Corp., Porteast Investment, and HDB Financial Services were traded the most on Thursday. 

In the primary market, National Bank for Financing Infrastructure and Development raised INR 21 billion through bonds maturing in five years at a coupon of 6.67%. Market participants said the cut-off was 3-4 basis points higher than the expectation due to low demand. "NaBFID used to go at finer (lower) levels... earlier the spread (between yield on NABARD paper and NaBFID paper) was almost 3-4 bps, but recently it has narrowed to just 1-2 bps," a dealer at a mid-sized brokerage firm said. Banks and mutual funds were the major investors in the issue, dealers said. 

The last time the state-owned entity tapped the market was on Apr. 7, when it raised INR 14.69 billion through bonds maturing on Apr. 8, 2030, at a coupon of 7.03% and INR 42.40 billion through bonds maturing on Apr. 7, 2035, at a coupon of 7.04%. The spread between the yield on the five-year NaBFID paper and the five-year benchmark NABARD bond was only 2 bps then. 

Adani Ports and Special Economic Zone also tapped the market Thursday with a 15-year bond and raised INR 50 billion at a coupon of 7.75%. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 67.20 million were traded at a weighted average yield of 5.6651-6.7489%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Thursday.

* INR 45.00 million of Uttar Pradesh's Mar. 10, 2029, Mar. 10, 2030, and Mar. 29, 2030 bonds were dealt at a weighted average yield of 6.2854-6.7489%

* INR 16.00 million of Tamil Nadu's Feb. 22, 2030 and Feb. 22, 2032 bonds were dealt at a weighted average yield of 6.3397-6.7145%

* INR 2.70 million of Haryana's Jun. 30, 2025 bonds were dealt at a weighted average yield of 5.6651%

* INR 2.00 million of Jharkhand's Mar.30, 2031 bonds were dealt at a weighted average yield of 6.5257%

* INR 1.50 million of Rajasthan's Jun. 23, 2026 bonds were dealt at a weighted average yield of 6.1435%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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