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Informist, Thursday, Jul. 17, 2025

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds ended steady in the secondary market Thursday, after moving 1-2 basis points, because most market participants limited their activity to meeting basic portfolio requirements, dealers said. Some activity was there but it was insignificant to move the yields, they said.

"There's not much happening in the market today (Thursday), as most people are doing only need-based trading, and we're not seeing any significant bets from traders," a dealer at a mid-sized brokerage firm said. "The market lacks cues to guide traders in placing bets, which is largely absent these days, resulting in levels remaining broadly unchanged since the start of the week. Although there's some volume, it's not enough to move yields significantly."

In the secondary market, deals aggregating INR 140.35 billion were recorded on the National Stock Exchange and BSE combined at 1800 IST on Thursday, up from INR 108.78 billion Wednesday. Mutual funds were said to be buying bonds, while corporate entities and banks were seen selling. Insurance companies and pension funds remained majorly on the sidelines, dealers said. Major trading was seen primarily in three- and five-year tenures, they added.

Papers issued by Rural Electrification Corp., HDFC Bank, Apex Homes, The Andhra Pradesh Mineral Development Corp., LIC Housing Finance, National Bank For Agriculture And Rural Development, L&T Finance, and Small Industries Development Bank of India were the most traded on the exchanges.

Merchant bankers believe some mutual funds are on the selling side, choosing to hold onto cash reserves in anticipation of better opportunities in the near future, which is why they're selling bonds. 

On the primary market side, several companies were due to raise funds Thursday with one-state owned entity. Power Finance Corp. Ltd. has set a coupon of 7.43% on its perpetual bonds and accepted bids aggregating to INR 4.75 billion. According to the bid book accessed by Informist, the company received 75 bids aggregating to INR 27.52 billion in the coupon range of 6.44-7.75%.

"PFC received a good response for its perpetual bond, and the coupon rate was in line with expectations," a fund manager at a mid-sized mutual fund house said. "If the amount was larger, despite it being a perpetual bond, they would likely have secured a better coupon rate." 

Aditya Birla Housing Finance Ltd. raised INR 1.35 billion through the issuance of bond maturing in March 2028. On Friday, traders eagerly await the THDC India bond issuance. Power sector entity has invited bids to raise INR 6.0 billion through the issuance of 10-year bond. Macrotech Developers has invited bids to raise INR 3.5 billion by issuing a 2028 bond. Going forward, merchant bankers expect primary market issuances to increase in the corporate debt market.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 75.00 million were traded at a weighted average yield of 6.1844-7.001%, data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System showed.

* INR 7.50 million of Uttar Pradesh's 2027 bond was dealt at a weighted average yield of 6.2858%

* INR 3.00 million of Uttar Pradesh's 2026 bond was dealt at a weighted average yield of 6.3704%

* INR 6.00 million of Haryana's 2026 bond was dealt at a weighted average yield of 6.1844%

* INR 3.00 million of Telangana's 2027, and Mar. 7, 2031, bonds were dealt at weighted average yields of 6.3199%

* INR 22.50 million of Rajasthan's 2026 bond was dealt at a weighted average yield of 6.2082%

* INR 1.00 million of Tamil Nadu's 2032, bond was dealt at a weighted average yield of 7.001%

* INR 30.00 million of Jharkhand's 2026 bond was dealt at a weighted average yield of 6.7096%

* INR 2.00 million of Jharkhand's 2031 bond was dealt at a weighted average yield of 6.6781%

BENCHMARK LEVELS FOR CORPORATE BONDS: 

Edited by Deepshikha Bhardwaj

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