India Corporate Bonds
Ylds steady amid US tariff uncertainty; volumes low
This story was originally published at 20:13 IST on 8 July 2025
Register to read our real-time news.Informist, Tuesday, Jul. 8, 2025
By Siddhi Chauhan
MUMBAI – Yields on the corporate bonds in the secondary market were broadly steady due to uncertainty on the global front, dealers said. Lack of direction on the domestic front also withered down investors interest, resulting in activity to be need based, they added.
"Overall activity is low in both (primary and secondary) markets because of uncertainity around US tariffs and whatever trading (buying and selling) is happening, it is all requirement based and there are no significant fresh positions from traders across segments."
The yields on the three-year, five-year, and 10-year papers issued by National Bank for Agriculture and Rural Development closed around Monday's level despite participation from banks and mutual funds, dealers said. Both the entities were said to be on both buying and selling sides due to their portfolio requirements, dealers said. Meanwhile, insurance companies which were active on Monday were said to be absent from the secondary market on Tuesday, dealers said.
"People are on the sideways because nobody knows what will happen going forward on the tariffs front," another dealer at a brokerage firm said. "He (Trump) has said a lot of things earlier as well, but then have backtracked from it. This is why everyone wants to wait for sometime."
The market will monitor updates regarding a preliminary US-India trade agreement as the deadline for reciprocal tariffs approaches, along with the minutes from the US Federal Open Market Committee meeting on Wednesday. A majority of traders anticipate that the US and India will finalise an initial trade agreement by the end of this week.
If a deal happens between the two countries, it may attract foreign portfolio investors to both equities and fixed income assets. Tuesday morning, US President Donald Trump stated that he was "nearing an agreement with India."
Commerce Minister Piyush Goyal had said on Friday that India would not enter into any trade agreement with any nation under a rigid timeline. He said that India would agree to a trade agreement only if it was advantageous for both parties. In the absence of a trade agreement, exports of Indian goods to the US may incur a 26% tax, as originally stated in April.
Trade volume in the secondary market were muted for the second consecutive trading session, with deals aggregating to INR 39.47 billion recorded on the National Stock Exchange and BSE combined at 1500 IST, down from INR 49.70 billion the previous session.
Papers issued by Rural Electrification Corp, Indian Railway Finance Corp., LIC Housing Finance, Indian Renewable Energy Development Agency, National Bank For Agriculture And Rural Development were the traded most on bourses.
The volumes in the primary market was also subdued Tuesday, and is expected to remain the same throughout this week, dealers said. On Wednesday, Ashiana Housing Ltd., and SMFG India Credit will tap the debt market with their respective issuances.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 58.90 million were traded at a weighted average yield of 6.2177-7.2236%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed Tuesday.
* INR 6.60 million of Uttar Pradesh's Jun. 2, 2028, bond was dealt at a weighted average yield of 6.2177%
* INR 44.00 million of Uttar Pradesh's Mar. 10, 2030, bond was dealt at a weighted average yield of 6.7793%
* INR 7.50 million of Chhatisgarh's Mar. 28, 2031, bond was dealt at a weighted average yield of 6.6479%
* INR 0.80 million of Rajasthan 's Feb. 7, 2027, bond was dealt at a weighted average yield of 7.2236%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | TUESDAY | MONDAY |
Three-year | 6.64-6.67% | 6.63-6.67% |
Five-year | 6.77-6.82% | 6.78-6.82% |
10-year | 7.03-7.07% | 7.02-7.06% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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