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Informist, Thursday, Aug. 14, 2025

 

By Vaishali Tyagi

 

MUMBAI – Corporate bond yields edged lower across tenures on Thursday, tracking the sharp fall in government bond yields after S&P Global Ratings upgraded India's sovereign credit rating to 'BBB' from 'BBB-', with a stable outlook. The rating upgrade was based on India's prioritisation of fiscal consolidation and the rating agency's confidence that US tariffs would not hinder the country's long-term growth prospects.

 

"Trading activity was low today (Thursday) due to the limited presence of traders, which resulted in minimal movement in corporate bond yields. Despite the S&P Global Ratings upgrade, the immediate reaction in the g-sec (government securities) market was bidirectional, with yields moving in both directions... therefore, in corporate bond yields fell to some extent, but it was limited," a dealer at a brokerage said. 

 

Dealers expect the impact of the rating upgrade to be temporary on the corporate bond market. Traders attributed the limited movement in corporate bond yields to the absence of traders in the market due to the long weekend. Friday is a holiday for Independence Day. "We expect Monday onwards, levels will come back and will settle down where they were two days ago," the dealer quoted above said. 

 

According to market participants, traders are also exercising caution due to the lack of clarity and uncertainty surrounding tariffs, which is limiting participation and yield movement. Dealers expect the talks between US President Donald Trump and Russian President Vladimir Putin on Friday to provide cues. The meeting is particularly significant as Trump has been pressuring Russia's partners, including India, about purchasing crude oil from Moscow.

 

In the secondary market, overall trade volume fell Thursday, with deals aggregating INR 105.47 billion recorded on the National Stock Exchange and the BSE combined, lower than INR 130.18 billion on Wednesday. Insurance companies were active on the selling side, while banks were active on the buying side, but were seen dealing in smaller quantities. Mutual funds were active on both the selling and buying sides. However, pension funds and corporate entities were largely absent from the market, dealers said. Trading took place across tenures Thursday.

 

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 Thursday.

 

In the primary market, five companies were scheduled to raise funds Thursday, aggregating INR 7.54 billion. Dealers speculated that bond issuances would pick up Monday onwards. "People are eyeing the primary market to pick up next week, and issuers are waiting for a stable environment to raise funds from the market as nobody wants to take risks," the dealer said.

 

On Monday, several companies are lined up to raise nearly INR 40.25 billion, including up to INR 25.00 billion by Torrent Investments through three bonds. Uno Minda plans to raise up to INR 2.0 billion through two bonds Monday while Vivriti Capital aims to raise INR 2.5 billion. 

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 18.00 million were traded at a weighted average yield of 6.6161-6.7288%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 12.00 million of Andhra Pradesh's 7.35%, 2030 bond was dealt at a weighted average yield of 6.7288%

* INR 6.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at a weighted average yield of 6.6161%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	THURSDAY	WEDNESDAY
Three-year	6.79-6.81%	6.79-6.84%
Five-year	6.88-6.92%	6.89-6.94%
10-year	7.08-7.12	7.09-7.13

 

End

 

Edited by Saji George Titus and Akul Nishant Akhoury

 

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