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Informist, Tuesday, Jul. 15, 2025

By Vidhushi RajPurohit

MUMBAI – Yields on corporate bonds ended steady Tuesday as activity in the secondary market remained subdued owing to the lack of fresh triggers, dealers said. There was selling from a few state-owned banks. Despite that, yields were mostly unchanged from the previous day on account of purchases made by mutual funds and insurance companies, they said. 

"A large public (sector) bank sold around INR 20.00 billion worth of bonds today (Tuesday)," a dealer at a broking firm said. "There was no view-based trading, some individual requirement would have been there."

The selling was largely concentrated in bonds maturing in 10 years, dealers said. Some selling was also seen in bonds maturing in 1-3 years. The market retained its steady momentum with some buying from fund houses which matched the selling quantum, they said.

Lack of fresh triggers has kept market participants mostly on the sidelines for the past few sessions, according to traders. Uncertainty regarding the Reserve Bank of India's variable rate reverse repo auctions has also kept volumes subdued. The RBI Tuesday conducted a three-day VRRR auction for INR 1.00 trillion.

This was the fourth VRRR auction conducted by the central bank this month. The liquidity surplus in the banking system has been above 1% of banks' net demand and time liabilities, a level that RBI Governor Sanjay Malhotra had identified as comfortable for rate transmission. According to the latest data, 1% of NDTL would put the liquidity surplus at around INR 2.34 trillion. The RBI Monday net absorbed INR 2.61 trillion of liquidity from the banking system, which is a proxy for surplus systemic liquidity. 

"The market does not have any clear direction and the VRRR auctions are also not providing clarity about liquidity conditions," a dealer at a mutual fund said. 

Deals aggregating to INR 91.15 billion were recorded on the National Stock Exchange and BSE combined, against INR 68.48 billion Monday. Paper issued by State Bank of India, National Bank for Agriculture and Rural Development, Apex Homes Private Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., and The Tata Power Company Ltd. were traded the most on the bourses.

In the primary market, Housing & Urban Development Corp. Ltd. set a coupon of 6.64% on its three-year bond and accepted bids aggregating to INR 30.00 billion. Wednesday, several non-banking finance companies are lined up to tap the market. The issuances include a big-ticket issuance by Bajaj Housing Finance Ltd., as the company plans to raise INR 10.00 billion through a three-year bond.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 30.80 million were traded at a weighted average yield of 6.1573-6.7005%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 10.50 million of Uttar Pradesh's Mar. 29, 2027, and Mar. 29, 2026, bonds were dealt at weighted average yields of 6.3044-6.4134%

* INR 10.00 million of Telangana's Mar. 7, 2032, and Mar. 7, 2027, bonds were dealt at weighted average yields of 6.7005-6.3373%

* INR 6.00 million of Haryana's Jul. 4, 2026, bond was dealt at a weighted average yield of 6.2167%

* INR 2.80 million of Tamil Nadu's Feb. 22, 2031, bond was dealt at a weighted average yield of 6.7003%

* INR 1.50 million of Rajasthan's Jun. 23, 2026, bonds was dealt at a weighted average yield of 6.1573%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Rajeev Pai

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