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Informist, Friday, May 30, 2025

By Ashna Mariam George 

MUMBAI – A higher-than-expected GDP print for Jan-Mar pushed up the yields on corporate bonds in the secondary market Friday. Yields rose by around 2-3 basis points across tenures, dealers said. "After the GDP data, G-sec (Government bond prices) started falling and corp bonds (yields) rose," a dealer at a mid-sized brokerage firm said. 

India's GDP growth for Jan-Mar rose to a four-quarter high of 7.4%, higher than the 6.8% estimated in an Informist poll. The higher print was supported by a higher government capital expenditure and a pick-up in construction activity, data released by the statistics ministry showed. GDP growth for 2024-25 (Apr-Mar) grew 6.5%, unchanged from the previous view, National Statistical Office said. 

However, market participants believe the higher-than-expected data will not forestall the Reserve Bank of India's Monetary Policy Committee from cutting the repo rate in the June policy next week. The rate-setting panel is scheduled to meet from Wednesday and the policy decision will be announced on Jun. 6. 

"The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation from the previous quarter," said Upasna Bhardwaj, chief economist, Kotak Mahindra Bank, in a note. "We expect the benign inflation and soft growth to continue to provide the Monetary Policy Committee room for incremental monetary easing, with a 25-basis-point cut in the upcoming June policy."

Dealers, too, echoed the same sentiment. "We still expect a 25 bps rate cut (in the June policy)...this will now keep the yields anchored, yields won't move that much until the policy," a fixed income fund manager at a large mutual fund house said. 

In the secondary market, deals aggregating INR 104.99 billion were recorded on the National Stock Exchange and the BSE combined, sharply down from INR 183.49 billion reported Thursday. While mutual funds were active on both buying and selling sides, few banks and pension funds were also active in the market Friday.

Papers issued by the REC, Power Finance Corp., National Bank For Agriculture And Rural Development, Porteast Investment, Bajaj Finance, and Indostar Capital Finance were traded the most on exchanges. 

Issuances in the primary market was dull Friday with no major issue being recorded.

UDAY BONDS

None of the Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market Friday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Akul Nishant Akhoury

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