India Corporate Bonds
Yields steady; Power Grid coupon in line with view
This story was originally published at 19:51 IST on 11 August 2025
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By Vaishali Tyagi
MUMBAI – Yields on corporate bonds ended steady in the secondary market Monday due to a lack of fresh domestic triggers, dealers said. Trading volume remained muted and most of the activity was driven by need-based trading, a dealer at a mid-sized brokerage firm said.
"There was some activity, but it was mainly need-based as investors do not see any cues ahead for some time," a dealer at a mid-sized brokerage firm said. "Some mutual funds were seen selling there in the market, and some banks and insurance companies were also seen tapping (secondary market) today (Monday) majorly in the shorter tenure based on the requirement, which was insignificant to move the yields."
During the initial hours of the trade, yields moved up 1-2 basis points due to some buying interest, but came back to the previous level later in the day as mutual funds and others sold, keeping yields within a narrow range. "We saw a slight dip of 1-2 bps earlier due to buying, but selling from mutual funds later pushed yields back to their previous levels," a dealer at another mid-sized brokerage firm said.
Trade volume was low Monday, with deals aggregating INR 66.85 billion being recorded on the National Stock Exchange and the BSE combined at 1500 IST, significantly lower than INR 92.93 billion on Friday. Mutual funds were active on selling side, while insurance companies were active on the buying side. Banks were seen active on both the selling and buying sides. However, pension funds were largely absent from the market, dealers said. Trading mostly took place in short-tenure papers.
Paper issued by HDB Financial Services Ltd., Bharti Telecom Ltd., Telangana State Industrial Infrastructure Corp. Ltd, National Bank For Agriculture And Rural Development, Power Finance Corp. Ltd., LIC Housing Finance Ltd, Apex Homes Pvt Ltd., Rural Electrification Corp. Ltd, India Infradebt Ltd.,Aditya Birla Finance Ltd., India Infrastructure Finance Company Ltd. were traded the most on the exchanges.
In the primary market, dealers speculated that bond issuances would pick up in the near term. A large number of companies were scheduled to raise funds Monday, aggregating to INR 122.75 billion. Power Grid Corp. of India Ltd. raised INR 50.0 billion through 10-year bond at a coupon of 6.98%, payable annually. The issue was fully subscribed.
"PGC (Power Grid Corp. of India Ltd.) received a fine response for its bond issue, and the coupon rate was largely in line with expectations," a fund manager at a mid-sized mutual fund house said.
Tuesday, very few companies will tap the corporate bond market to borrow capital through their respective bond issuances totalling to nearly INR 11.0 billion. L&T Finance Ltd. plans to raise up to INR 10.00 billion through a bond maturing March 15, 2028. Finkurve Financial Services Ltd. has invited bids to raise up to INR 490 million through a bond maturing in three years. Edel Finance Co. Ltd. has invited bids to raise INR 300 million through a bond maturing on October 30, 2028.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 3.50 million were traded at a weighted average yield of 6.4044-6.7463%, according to data from the RBI's Negotiated Dealing System-Order Matching System.
* INR 2.00 million of Jharkhand's 8.72%, 2031 bond was dealt at a weighted average yield of 6.7463%
* INR 1.50 million of Uttar Pradesh's 8.19%, 2026 bond was dealt at a weighted average yield of 6.4044%
BENCHMARK LEVELS FOR CORPORATE BONDS:
| Tenure | MONDAY | FRIDAY |
| Three-year | 6.72-6.74% | 6.72-6.75% |
| Five-year | 6.83-6.86% | 6.81-6.84% |
| 10-year |
7.04-7.07% |
7.03-7.07% |
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
With inputs from Aaryan Khanna
Edited by Deepshikha Bhardwaj
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