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Informist, Tuesday, Jul. 22, 2025

By Vidhushi RajPurohit

MUMBAI – Yields in the secondary market remained steady Tuesday with low trading volumes as investors were primarily engaged in requirement-based trades, dealers said. The absence of fresh cues further led to a subdued appetite among investors, which was reflected in the low market turnover.

Banks were seen selling short-term bonds in low volumes in the secondary market, likely to meet their funding needs amid the goods and services tax outflows, dealers said. The total tax outflows, which commenced Monday, are pegged around INR 1.50 trillion to 1.80 trillion by traders. The net liquidity absorbed by the RBI--a proxy for the systemic liquidity surplus--fell to INR 2.40 trillion on Monday from INR 3.04 trillion Sunday. Moreover, banks have parked INR 2 trillion with the Reserve Bank of India at its seven-day variable rate reverse repo auction Friday. Despite banks selling, yields remained steady as the impact was offset by buying from mutual funds, dealers said. 

"Activity is very low and it is mostly because there is no direction right now," a dealer at a brokerage said. Trade volume in the secondary market remained low. On the National Stock Exchange and the BSE combined reported deals, aggregating INR 76.96 billion, down from INR 103.34 billion Monday. Papers issued by REC, Housing and Urban Development Corp., Embassy Office Parks REIT, Indian Railway Finance Corp., The Andhra Pradesh Mineral Development Corp., Cholamandalam Investment and Finance Co., Power Finance Corp., National Bank for Agriculture and Rural Development and Bajaj Finance were the most traded on the exchanges.

Activity in the primary market, on the other hand, is seen picking up. On Tuesday, issuances aggregating INR 28.05 billion were lined up. For Wednesday, traders are eyeing some of the big-ticket issuances by Embassy Office Parks REIT, Small Industries Development Bank of India and Mahindra Rural Housing Finance, which will tap the market through bond issuances. Total issuances lined up for Wednesday amount to INR 88.65 billion. 

Embassy Office Parks REIT has invited bids to raise up to INR 20 billion through bonds maturing on Jul. 24, 2035, while Small Industries Development Bank of India will tap the debt market to raise up to INR 60 billion through bonds maturing on Oct. 27, 2028.

"It is normal for companies to tap the market now after this long gap as rates are a bit more stable, which is good for issuers," a dealer at another brokerage firm said. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 21.00 million were traded at a weighted average yield of 7.0067-7.1534%, according to data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System Tuesday.

* INR 8.00 million of Tamil Nadu's Mar. 22, 2029, bond was dealt at a weighted average yield of 7.0067%

* INR 5.00 million of Punjab's Mar. 31, 2031, bond was dealt at a weighted average yield of 7.1473%

* INR 8.00 million of Uttar Pradesh's Mar. 29, 2029, and Jun. 2, 2030, bonds were dealt at weighted average yields of 7.1152-7.1534%

BENCHMARK LEVELS FOR CORPORATE BONDS: 

End

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

Edited by Saji George Titus

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