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Informist, Wednesday, Aug. 13, 2025

 

By Vaishali Tyagi and Ketaki Patil

 

MUMBAI – Corporate bond yields in the secondary market ended 4-5 basis points higher across tenures as most mutual funds sold bonds, dealers said. Traders sold bonds, moving instead to government securities because of lucrative yield levels there in early trade, dealers said. The rise in government bond yields was driven by reduced risk appetite amid uncertainty over the future trajectory of domestic interest rates. The yield on the 10-year benchmark 6.33%, 2035 bond rose above psychological levels of 6.50%, which led to some cautious selling in corporate bonds. However, the yield on the 10-year benchmark 6.33%, 2035 bond ended at 6.4811%.

 

Yields on corporate bonds rose more than 5-7 bps during the day but declined later as government bonds yields fell later in the day after traders bought government bonds to cover their short bets. Some foreign banks and portfolio investors also bought bonds in light quantities as yields have turned attractive, they said. Traders also found gilts maturing in 15 years lucrative. Long-term investors such as insurers also picked up gilts maturing in 30-40 years. The yield on the 10-year benchmark 6.33%, 2035 bond ended at 6.4811%.

 

"Gilts (government bonds) shot up in the morning as some traders sold bonds due to uncertainity and once 10-year benchmark reached around 6.50%, more selling came due to low risk appetite....which led to heavy selling in corporate bond also mostly by mutual funds but later some bank buying came which limited the rise in yields," a dealer at a brokerage firm said.

 

In the secondary market, overall trade volume fell Wednesday, with deals aggregating INR 105.47 billion being recorded on the National Stock Exchange and the BSE combined, lower than INR 130.18 billion on Tuesday. 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 took place across tenures Wednesday.

 

Papers issued by Rural Electrification Corp., Indian Railways Finance Corp., Apex Homes, The Andhra Pradesh Mineral Development Corp., LIC Housing Finance, Telangana State Industrial Infrastructure Corp., National Bank For Agriculture And Rural Development, and Tata Projects were traded the most on exchanges on Wednesday.

 

In the primary market, dealers speculated that bond issuances would pick up early next week. Only five companies were scheduled to raise funds Wednesday, aggregating to INR 7.54 billion. On Thursday, very few companies will tap the corporate bond market to borrow capital through their respective bond issuances totalling nearly INR 7.10 billion.

 

On Thursday, Aditya Birla Capital Ltd. will tap the market to raise up to INR 4.00 billion. Aseem Infrastructure Finance Ltd. plans to raise up to INR 2.50 billion through two bonds. IIFL Samasta Finance Ltd. is also in line to tap the corporate debt market to raise funds of INR 600 million. 

 

"We expect market (primary) activity to pick up next week," a dealer at a mid-sized brokerage firm said. "Since this time it is long weekend and people avoid raising or fresh issuance activity declines, therefore, we saw little less volume this week in primary market, but we expect it to pick Monday onwards."

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 18.20 million were traded at a weighted average yield of 6.7011-7.3671%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 6.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at a weighted average yield of 6.7011%

* INR 4.50 million of Tamil Nadu's 8.24%, 2028 bond was dealt at a weighted average yield of 6.8988%

* INR 1.70 million of Tamil Nadu's 8.04%, 2029 bond was dealt at a weighted average yield of 6.7089%

* INR 4.00 million of Chhattisgarh's 8.67%, 2028 bond was dealt at a weighted average yield of 7.2593%

* INR 2.00 million of Jharkhand's 8.65%, 2028 bond was dealt at a weighted average yield of 7.3671%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	WEDNESDAY	TUESDAY
Three-year	6.79-6.84%	6.73-6.75%
Five-year	6.89-6.94%	6.84-6.87%
10-year	7.09-7.13	7.05-7.08%

 

End

 

Edited by Avishek Dutta

 

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