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Informist, Wednesday, Aug. 20, 2025

 

By Ketaki Patil and Vaishali Tyagi

 

MUMBAI – Corporate bond yields in the secondary market ended steady after moving in a narrow range on Wednesday, amid limited trading activity due to the absence of significant global or domestic market triggers. Market participants focused primarily on meeting basic portfolio requirements, they said.

 

"Some activity was there but was very limited, and it was lower compared to yesterday (Tuesday). Most traders were there to do requirement-based deals," a dealer at a mid-sized brokerage firm said. "Market (corporate bond market) is currently range-bound, even though it goes 4-5 bps (basis points) higher, but it returns to previous levels, due to muted interest from investors amid a lack of directional triggers. Despite some selling pressure from mutual funds, banks and insurance companies have absorbed these sales comfortably, which maintained market stability."

Traders are exercising caution in the corporate bond market due to volatility in the government securities market. Yield on the 10-year benchmark 6.33%, 2035 gilt closed at 6.50% Wednesday, against 6.51% on Tuesday, with yields moving in a range of 6.48% to 6.53% during the day. 

 

Traders believe that the proposed goods and services tax reforms will have a limited fiscal impact. "The G-sec (government securities) market is very volatile, which is leading traders to wait for stability in the G-sec market before taking significant positions," the dealer quoted above said. "So, we are expecting the G-Sec to get completely stabilised soon... And once it gets stable, the (corporate bond) market will pick up." 

 

Market participants also analysed S&P Global Ratings' comments 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. State Bank of India has also said in a research report that the government would meet its fiscal deficit aim.

 

In the secondary market, deals aggregating to INR 100.72 billion were recorded on the National Stock Exchange and BSE combined Wednesday, lower than INR 114.30 billion on the previous day. Mutual funds, along with a handful of corporates, were seen selling bonds across tenures, dealers said. Banks and insurance companies were seen buying across tenures. Pension funds were seen largely absent from the market.

 

Papers issued by Krazybee Services, Akara Capital Advisors, The Andhra Pradesh Mineral Development Corp., Sammaan Capital, National Bank for Agriculture and Rural Development, Navi Finserv, and Kerala Infrastructure Investment Fund Board were the most traded on exchanges on Wednesday.

 

In the primary market Wednesday, companies were to raise funds aggregating INR 7.20 billion. Demuric Holdings raised INR 5.0 billion by issuing two-year bonds at a fixed coupon of 12.50%.

 

On Thursday, bond issuances aggregating INR 20.50 billion have been lined up. HDB Financial Services plans to raise up to INR 10 billion through bonds maturing on Aug. 6, 2027. Nuvama Wealth and Investment has invited bids to raise INR 4 billion through 3 bonds with different maturities. Kotak Mahindra Investments plans to raise up to INR 3 billion through bonds maturing Nov. 28, 2028. Hero Fincorp and Iifl Samasta Finance have also invited bids for their bonds. 

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 77.60 million were traded at a weighted average yield of 6.637-7.4079%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 44.00 million of Uttar Pradesh's 8.75%, 2030 bond was dealt at a weighted average yield of 6.6370%

* INR 10.00 million of Telangana's 8.04%, 2031 bond was dealt at a weighted average yield of 6.9158%

* INR 10.00 million of Rajasthan's 8.39%, 2026 bond was dealt at a weighted average yield of 7.0017%

* INR 6.60 million of Punjab's 8.45%, 2027 bond was dealt at a weighted average yield of 7.4079%

* INR 4.00 million of Haryana's 8.21%, 2026 bond was dealt at a weighted average yield of 7.0026%

* INR 2.00 million of Jharkhand's 8.65%, 2028 bond was dealt at a weighted average yield of 6.7389%

* INR 1.00 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at a weighted average yield of 6.7400%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

Tenure	WEDNESDAY	TUESDAY
Three-year	6.83-6.85%	6.83-6.86%
Five-year	6.94-6.96%	6.95-6.99%
10-year	7.12-7.14%	7.12-7.15%

 

End

 

Edited by Saji George Titus

 

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