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Informist, Tuesday, Aug. 12, 2025

By Janwee Prajapati 

MUMBAI – Yields on corporate bonds moved 1-2 basis points higher in the secondary market Tuesday, tracking movement in the government securities market, dealers said. Corporate bond yields rose more than 2-3 bps earlier in the day, but settled slightly higher from previous day levels. Some traders participated according to their requirements, they added. 

"There was good activity in the corporate bond market, but it was mainly due to a rally in the government bond market," a dealer at a mid-sized brokerage firm said. "Some mutual funds were seen active on both selling and buying side in the market, and some banks were also seen tapping (secondary market) today (Tuesday) trading in low volumes majorly in the shorter tenure based on the requirement. Corporate entities were mostly seen selling."

Government bond yields rose following higher-than-expected cut-offs at the state bond auction for most bonds, and investors likely sold gilts in the secondary market following the result. 

In secondary market, overall trade volume rose significantly Tuesday, with deals aggregating INR 130.18 billion being recorded on the National Stock Exchange and the BSE combined, notably higher than INR 66.85 billion on Monday. Corporate entities were active on the selling side, while banks were active on the buying side but were seen dealing in low volumes. Mutual funds were seen active on both the selling and buying sides. However, pension funds and insurance companies were largely absent from the market, dealers said. Trading mostly took place in short-tenure papers.

Papers issued by Indian Railway Finance Corp. Ltd., National Bank For Agriculture And Rural Development, Rural Electrification Corp. Ltd., Telangana State Industrial Infrastructure Corp. Ltd., Telangana State Industrial Infrastructure Corp. Ltd., Prius Commercial Projects Pvt Ltd., Cholamandalam Investment And Finance Company Ltd., Rural Electrification Corp. Ltd, Tata Projects Ltd., LIC Housing Finance Ltd, The Andhra Pradesh Mineral Development Corp. Ltd., Bajaj Finance Ltd. were traded the most on the exchanges.

In the primary market, dealers speculated that bond issuances would pick up in the near term. Only three companies were scheduled to raise funds Tuesday, aggregating to INR 10.79 billion. Wednesday, very few companies will tap the corporate bond market to borrow capital through their respective bond issuances totalling to nearly INR 6.29 billion. On Wednesday, ESAF Small Finance Bank will tap the corporate bond market to raise up to INR 750 million and seeks bids. This will be the first bond issuance by any bank in August so far. HDB Financial Services plans to raise up to INR 5.00 billion through a bond maturing Sept. 22, 2028. Akara Capital Advisors Pvt. Ltd. and Pahal Financial Services Pvt. Ltd. are also in line to tap the corporate debt market to raise funds. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 19.10 million were traded at a weighted average yield of 6.1029-8.3600%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

* INR 6.60 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at a weighted average yield of 6.1029%

* INR 2.00 million of Uttar Pradesh's 8.14%, 2026 bond was dealt at a weighted average yield of 8.1100%

* INR 5.00 million of Punjab's 8.22%, 2026 bond was dealt at a weighted average yield of 8.1900%

* INR 2.00 million of Punjab's 8.22%, 2026 bond was dealt at a weighted average yield of 8.1900%

* INR 2.00 million of Jammu and Kashmir's 8.22%, 2026 bond was dealt at a weighted average yield of 8.1900%

* INR 1.50 million of Rajsthan's 8.39%, 2026 bond was dealt at a weighted average yield of 8.3600%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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