India Corporate Bonds
Yields steady, traders on sidelines on lack of cues
This story was originally published at 20:07 IST on 21 July 2025
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By Vidhushi RajPurohit
MUMBAI – Yields on corporate bonds remained steady as market participants cited dearth of fresh triggers in the market. Activity in the market remained mixed with churning of portfolios by mutual funds and some need-based trading by other participants, dealers said.
"Market was flattish today (Monday), primary issuances were also not that major," a dealer at a mid-size brokerage firm said. "On Friday, market tracked G-sec (government securities) but today (Monday) there was not much momentum there as well."
Banks and mutual funds were active on both the buying and selling sides of the bond market across tenures, though in low volumes, dealers said. Some insurance companies were also active in the longer-tenure papers, they said. Traders do not expect any significant impact on yields from the outflows for goods and services tax payment which commenced Monday and is expected to drain around INR 1.75 trillion from the banking system. On Sunday, the systemic liquidity surplus was at INR 3.04 trillion, as indicated by the central bank's net absorption of funds from the banking system.
Deals aggregating INR 103.34 billion were recorded on the National Stock Exchange and the BSE combined Monday, compared with INR 98.96 billion reported Friday. Papers issued by Rural Electrification Corp. Ltd., IIFL Samasta Finance Ltd., Muthoot Capital Services Ltd., Sammaan Capital Ltd., and Muthoot Fincorp. Ltd. were the most traded on the exchanges.
In the primary market, only one non-banking financial entity, Annapurna Finance, sought bids to raise INR 750 million through two-year bond issue. Several companies are lined up to tap the primary market Tuesday. Traders are eyeing some of the big-ticket issuances by Aditya Birla Capital Ltd., PNB Housing Finance Ltd., and Kerala Financial Corporation and Aditya Birla Capital Ltd., which will tap the market through their respective bond issuances Tuesday.
Aditya Birla Capital has invited bids to raise up to INR 5 billion through bonds maturing on Jul. 20, 2035, while PNB Housing Finance will tap the debt market to raise up to INR 4.0 billion through bonds maturing in five years.
Going forward, traders expect primary market issuances to increase in the corporate debt market, driven by a steady rise in state-owned entities tapping the market. Additionally, some banks may also enter the market as many have received board approvals to raise funds through corporate bonds.
UDAY BONDS
No Ujjwal DISCOM Assurance Yojana bonds were traded in the secondary market Monday, according to the Reserve Bank of India's Negotiated Dealing System–Order Matching System.
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | MONDAY | FRIDAY |
Three-year | 6.66-6.69% | 6.68-6.70% |
Five-year | 6.76-6.80% | 6.79-6.81% |
10-year | 7.05-7.08% | 7.04-7.06% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Subhojit Sarkar
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