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Informist, Friday, Jul. 25, 2025

 

By Vaishali Tyagi

 

MUMBAI – Corporate bond yields in the secondary market Friday ended 2-3 basis points higher across tenures, tracking an upward trend in government securities, dealers said. Government bond yields surged after Reserve Bank of India Governor Sanjay Malhotra's comments earlier in the day indicated that the RBI's Monetary Policy Committee was unlikely to cut the repo rate in the near term. This led traders who were betting on a rate cut in August to shed their positions, dealers said

 

"Yields in debt (corporate) market edged slightly higher following movements in gilts (government securities), as investors assessed the RBI governor's speech at an event," a dealer at a brokerage firm said. "There wasn't much material movement, just some fluctuations within a range, and yields ended 1-2 bps higher."

 

Apart from this, major traders in the secondary market are largely holding back, resulting in lower volumes, dealers said. Moreover, investors are focusing on participating in the primary market as fresh bond issuances are coming to the market, they added.

 

Trade volume was low Friday, with deals aggregating INR 84.68 billion being recorded on the National Stock Exchange and the BSE combined, down from INR 108.61 billion on Thursday. Insurance companies and some mutual funds were active in selling longer-tenure paper. Pension funds were active on both the selling and buying sides across tenures, dealers said. Some mutual funds and a few private companies bought and sold shorter-tenure paper, a few dealers said. Banks were also present in the corporate debt market.

 

Paper issued by Vivriti Capital, REC, Tata Capital Housing Finance, HDFC Bank, Indian Railway Finance Corp., State Bank of India, The Andhra Pradesh Mineral Development Corp., Muthoottu Mini Financiers, LIC Housing Finance were traded the most on the exchanges. 

 

In the primary market, several non-banking financial companies lined up to raise funds Friday. However, the deals could not be confirmed till the time of reporting. On Monday, several companies lined up to raise funds aggregating over INR 40 billion. Godrej Finance has invited bids to raise INR 10 billion through the issuance of five-year bond. Godrej Seeds & Genetics  will tap the market to raise INR 20 billion through the issuance of October 2028 bond issue. Muthoot Capital Services will tap the corporate debt market to raise up to INR 2.00 billion through bonds maturing on July 2027. 

 

"Investors are eagerly waiting for fresh issuances from state-owned entities and they always remain in focus," the dealer quoted above said. "Now, few more such big issuances are expected after marquee issuances like NABARD and SIDBI."

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 22.00 million were traded at a weighted average yield of 6.8036-7.0365%, according to data from the Reserve Bank of India's Negotiated Dealing System–Order Matching System Thursday.

 

* INR 10.00 million of Telangana's bond was dealt at a weighted average yield of 6.87495%

* INR 5.00 million of Uttar Pradesh's bond was dealt at a weighted average yield of 7.009%

* INR 7.00 million of Punjab's two bonds of different maturities were dealt at weighted average yields of 6.8036-7.0365%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	FRIDAY	THURSDAY
Three-year	6.68-6.71%	6.66-6.68%
Five-year	6.78-6.82%	6.76-6.80%
10-year	7.07-7.10%	7.06-7.08%

 

End

 

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

 

Edited by Akul Nishant Akhoury

 

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