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Informist, Monday, Jun. 2, 2025

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds were broadly unchanged in the secondary market on Monday amid low volumes, dealers said. The activity in the market was low as it was mostly requirement-based trading, a dealer at a mid-sized brokerage firm said. Mutual funds mostly bought papers, while others sold based on requirement, which was insignificant to move the yields, the dealer said.

Yields on corporate bonds fell only 1-2 basis points but recovered later and remained in the narrow range, dealers said. "It was only 1 or 2 bps down because there was slight buying earlier. However, some selling also came in later from pension funds, which pushed the yields to earlier levels," a dealer at another mid-sized brokerage firm said. 

Dealers said investors are cautious, refraining from major buying or selling activity ahead of the Reserve Bank of India's Monetary Policy Committee meeting. The rate-setting panel's meeting will start on Wednesday and end on Friday. Traders widely expect the rate-setting panel to cut the policy repo rate by 25 bps. 

In the secondary market, deals aggregating INR 96.97 billion were recorded on the National Stock Exchange and the BSE combined, sharply lower than INR 104.99 billion reported on Friday. Mutual Funds were active on the buying side, while pension funds were seen selling bonds across tenures. Banks were selling and buying papers, while insurance companies kept on the sidelines. "The trading activity was very low today (Monday) and it was clearly not even what we did on Friday at this hour," the dealer quoted above said. "It appears that traders are currently avoiding making significant bets ahead of the RBI monetary policy decision."

Papers issued by Bank of India, Apex Homes, LIC Housing Finance, Power Finance Corp., Bajaj Finance, National Bank for Agriculture and Rural Development, Poonawalla Fincorp, and Shriram Finance were traded the most on the exchanges.

On Monday, activity in the primary market was moderate. On Tuesday, Pimpri Chinchwad Municipal Corp has invited bids to raise INR 2 billion through a five-year bond. Edel Finance Co. and Hinduja Leyland Finance will also tap the market to raise funds through bonds on Tuesday.

Merchant bankers expect primary market issuances to increase, driven by growing investor interest in state-owned bond issuances and AAA-rated papers. "There's likely to be a slew of issuances as traders are expecting better interest from investors with increased activity in the primary market," the dealer quoted above said. 

UDAY BONDS

Ujjwal DISCOM Assurance Yojana bonds were not traded in the secondary market on Friday, as per the Reserve Bank of India's Negotiated Dealing System–Order Matching System.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Saji George Titus

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