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Informist, Wednesday, Jul. 30, 2025

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds remained in a narrow range in the secondary market on Wednesday due to limited activity in the absence of global and domestic triggers, dealers said. "There was some activity, but it was just requirement-based," a dealer at a mid-sized brokerage firm said. "Market is currently range-bound, and investor enthusiasm is muted due to the absence of domestic or global triggers that could provide direction. Whatever selling pressure we've seen from mutual funds has been comfortably absorbed by banks and insurance companies," the dealer said.

Tracking government securities, yields on corporate bonds rose only 1-2 basis points during the day, but settled at previous day's levels, dealers said. "It was only 1 or 2 bps up because G-secs (government securities) rallied slightly during the day (yields went up)," a dealer at another mid-sized brokerage firm said. The yield on the benchmark 10-year 6.33%, 2035 government bond ended at 6.37%, marginally higher than 6.36% on Tuesday.

Government bond yields were up tracking a sharp fall in the rupee during the day, dealers said. The rupee continued to fall against the dollar, hitting the day's low of 87.5100 against the dollar from Tuesday's closing level of 86.8150, as stop-losses were triggered, forex market participants said. 

"Market participants are primarily engaging in need-based trading, fine-tuning their bond portfolios by trimming or adding positions," dealers said. Traders have largely ruled out any rate cut at the Reserve Bank of India's Monetary Policy Committee meeting next week. 

A few mutual funds were seen selling corporate bonds in the secondary market due to redemption pressure, dealers said. Investors are holding back investments for upcoming fresh bond issuances, dealers added.

In the secondary market, deals aggregating INR 89.54 billion were clocked on the National Stock Exchange and BSE combined, lower than INR 132.49 billion reported on Tuesday. Mutual funds were active on both the buying and selling sides. Banks, insurance companies, and pension funds remained on the sidelines, dealers said.

Mutual funds were seen selling papers across tenures while insurance companies and banks were active on both sides and across tenures, dealers said. A few private companies and pension funds bought longer and shorter-tenure papers, a few dealers said.

Papers issued by HDFC Bank, Century Textiles and Industries, Keertana Finserv, Andhra Pradesh Mineral Development Corp., LIC Housing Finance, Telangana State Industrial Infrastructure Corp., National Bank for Agriculture and Rural Development, Navi Finserv, and Kerala Infrastructure Investment Fund Board were traded the most on the exchanges.

In the primary market, several companies were due to raise funds Wednesday. Indigrid Infrastructure Trust raised INR 19.0 billion at a coupon of 7.345%. On Thursday, several companies plan to raise funds through corporate bond issuances. ICICI Home Finance Co. plans to raise INR 4.0 billion through bonds maturing in November 2028. Sundaram Home Finance has invited bids to raise INR 4.0 billion through five-year bonds. Apart from these, traders are eyeing issuances by Keertana Finserv, SMFG India Home Finance Co., and Muthoot Fincorp.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 14.5 million were traded at a weighted average yield of 6.3085-7.0247%, according to data from the Reserve Bank of India's Negotiated Dealing System-Order Matching System Wednesday.

* INR 6.50 million of Uttar Pradesh's bond with coupon of 8.42%, maturing in 2027 was dealt at a weighted average yield of 7.0117%

* INR 5.00 million of Uttar Pradesh's bond with coupon of 8.38%, maturing in 2027 was dealt at a weighted average yield of 6.3085%

* INR 3.00 million of Telangana's bond maturing in 2027 was dealt at a weighted average yield of 7.0247%

End

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

Edited by Ashish Shirke

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