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Informist, Tuesday, Aug. 19, 2025

 

By Vaishali Tyagi

 

MUMBAI – Corporate bond yields rose 3-4 basis points in the secondary market on Tuesday, tracking a rise in government bond yields. Traders sold corporate bonds in the secondary market to buy government bonds due to lucrative levels. The 10-year benchmark gilt yield rose close to the psychologically crucial level of 6.55% during the day, as stop-losses were triggered. Traders placed short bets on gilts due to market uncertainty, contributing to the rise in yields. However, the 10-year benchmark 6.33%, 2035 gilt closed at 6.51%, against 6.50% yield on Monday.

 

In early trading hours, corporate bond yields remained steady across tenures amid thin trade, dealers said. The low participation was attributed to weather-related disruptions in Mumbai, which kept traders away from trading desks, resulting in need-based trading. The absence of fresh market cues also contributed to the steady yields in early hours. 

 

Dealers said that market participants were also assessing S&P Global Ratings' comments in a webinar Tuesday that the central government's revenues are unlikely to see a major hit in the near term from the proposed overhaul of the goods and services tax system. 

 

"Corporate bond market activity was subdued earlier today due to weather-related disruptions that forced most traders to work from home, resulting in need-based trading," a dealer at a mid-sized brokerage firm said. "Market picked up pace post 2 PM (1400 IST) when corporates rushed to buy government bonds, which drove market activity."

 

In the secondary market, deals aggregating to INR 114.30 billion were recorded on the National Stock Exchange and BSE combined at on Tuesday, higher than INR 87.83 billion on Monday. Mutual funds and a handful of banks were seen selling and buying bonds across tenures, while insurance companies and primary dealers actively traded papers in shorter tenures in low volume, dealers said. Corporate entities were actively seen selling bonds across tenures, dealers said.

 

Papers issued by Sammaan Capital Ltd., National Bank For Agriculture And Rural Development, The Andhra Pradesh Mineral Development Corp. Ltd., National Bank For Agriculture And Rural Development, Navi Finserv Ltd., Kerala Infrastructure Investment Fund Board, were the most traded on exchanges on Tuesday.

 

In the primary market Tuesday, several companies were to raise funds aggregating to INR 17.70 billion through corporate bond issuances. On Wednesday, bond issuances in the primary market will be in low volume, aggregating to INR 7.2 billion. Demuric Holdings Pvt. Ltd. plans to raise INR 5.00 billion through two-year bonds. Satin Creditcare Network Pvt. Ltd. has invited bids to raise up to INR 750 million through bonds maturing in seven years. Vedika Credit Capital Ltd., Akara Capital Advisors Pvt. Ltd. and Midland Microfin Ltd. have invited bids for their respective bonds.

 

Going ahead, market participants expect more issuers to raise funds through the primary market in the near term. "Some names are there on the list to issue bonds, I think (HUDCO) Housing and Urban Development Corp. will likely tap the market to raise funds very soon," said the dealer quoted earlier. 

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 32.80 million were traded at a weighted average yield of 7.0547-7.4719%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 10.00 million of Rajasthan's 8.39%, 2026 bond was dealt at a weighted average yield of 7.4238%

* INR 10.00 million of Madhya Pradesh's 8.05%, 2029 bond was dealt at a weighted average yield of 7.4273%

* INR 2.20 million of Tamil Nadu's 8.24%, 2028 bond was dealt at a weighted average yield of 7.0547%

* INR 6.60 million of Punjab's 8.45%, 2027 bond was dealt at a weighted average yield of 7.4492%

* INR 4.00 million of Haryana's 8.21%, 2026 bond was dealt at a weighted average yield of 7.4719%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

Tenure	TUESDAY	MONDAY
Three-year	6.83-6.86%	6.81-6.83%
Five-year	6.95-6.99%	6.91-6.95%
10-year	7.12-7.15%	7.10-7.13

 

End

 

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

 

Edited by Avishek Dutta

 

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