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Informist, Wednesday, Jul. 23, 2025

By Vaishali Tyagi

MUMBAI – Corporate bond yields ended steady Wednesday as market participants shifted focus to issuances in the primary market, dealers said. With several biddings in the primary market, participation in the secondary market was dull Wednesday, dealers said. "Activity in the secondary market was relatively subdued today (Wednesday), as many traders focused on primary market issuances," a dealer at a mid-sized brokerage firm said. "The primary market is gaining traction, with marquee issuers raising significant amounts and more expected to follow the suit eventually."

The primary market was busy Wednesday with two big issuances during the day, along with several issuances of non-banking finance companies. The Small Industries Development Bank of India tapped the debt market and raised a whopping INR 59.26 billion through bonds maturing on Oct. 25, 2028 at a coupon of 6.66%. Another issuer, Embassy Office Parks REIT raised INR 20 billion through a 10-year bond issue, at 7.25%. The cut-offs for these issuances were largely in line with market expectations, dealers said. 

"SIDBI's cut-off was on expected lines as market kept the band of 65-67 (6.65-6.67%), and this was expected as this is a 'AAA' rated paper and even amount was good. Therefore, dealers had this expectation, which was fair," a fund manager at a mutual fund house said. 

On Thursday, several issuances are lined up to tap the corporate debt market. National Bank for Agriculture and Rural Development will tap the corporate debt market to raise up to INR 70 billion through Oct. 12, 2028 bond issue. Along with this, Sustainable Energy Infra Trust and Ambit Finvest Pvt. Ltd. have sought bids to raise funds through their respective bonds.

On the secondary market side, overall trade volume remained down Wednesday with deals aggregating to INR 109.79 billion recorded on the National Stock Exchange and BSE combined. On Tuesday, the volume was INR 76.96 billion. Mutual Funds and banks were active on both the selling and buying sides across tenures, dealers said. Some mutual funds and a handful of insurace companies bought longer-tenure bonds, a few dealers said. Pension Funds were largely absent from the corporate debt market. 

During the early trade hours, yields levels in the secondary market went marginally up by 1-2 basis points due to selling pressure from mutual funds facing cyclical redemption. However, levels came back to previous days close later. "Some mutual funds were definitely under some redemption pressure that's why some selling came in morning hours today (Wednesday)....towards the end of the month usually they (mutual funds) sell," the dealer quoted above said.

Papers issued by the Vivriti Capital, REC, HDFC Bank, the National Bank for Agriculture and Rural Development, the Small Industries Development Bank of India, Power Finance Corp., Sammaan Capital, and Apex Homes were most traded on the exchanges.  

Dealers said the RBI's variable-rate repo auction had no impact on the corporate debt market yield levels, despite some traders anticipating the move amid elevated overnight money market rates. The central bank conducted a two-day auction for INR 500 billion on Wednesday. Market participants now expect another auction of the same amount on Thursday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 15.00 million were traded at a weighted average yield of 6.5165-6.9972%, according to data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System Tuesday.

* INR 15.00 million of Uttar Pradesh's Mar. 10, 2029, and Mar. 29, 2029, bonds were dealt at weighted average yields of 6.5165-6.9972%

BENCHMARK LEVELS FOR CORPORATE BONDS: 

End

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

Edited by Deepshikha Bhardwaj

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