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Informist, Monday, Sept. 1, 2025

 

By Ketaki Patil

 

MUMBAI – Yields on corporate bonds in the secondary market rose Monday as traders sold bonds due to persistent volatility in yields in the government securities market, dealers said. However, traders abstained from taking aggressive bets, resulting in low volume in the secondary market, they said. The 10-year benchmark 6.33%, 2035 gilt closed at a yield of 6.59%, as against 6.57% Friday. The 10-year 2035 gilt yields were volatile during the day ahead of the larger-than-indicated state bond auction Tuesday, dealers said.

 

"There was some selling in the market by mutual funds (mainly). However, overall participation remained low," a dealer at a brokerage firm said. "People avoid putting large bets in such an uncertain environment when the G-sec and the rupee market are uncertain." 

 

Dealers expect participation in the secondary market to be low till Ananth Chaturthi, as many traders are on leave. In the secondary market, deals aggregating to INR 19.19 billion were recorded on the National Stock Exchange and BSE combined on Monday at 1530 IST, significantly lower than INR 55.10 billion on Friday. Mutual funds were active in selling across tenures, dealers said. Banks and insurance companies were active on both the buying and selling sides in shorter-tenure bonds. Pension funds and corporate entities were largely absent from the market Monday.

 

Papers issued by Kerala Infrastructure Investment Fund Board, Adani Enterprises, Telangana State Industrial Infrastructure Corp., Navi Finserv, Krazybee Services, and Andhra Pradesh Mineral Development Corp. were the most traded papers on exchanges on Monday.

 

In the primary market, activity remained muted with issuances aggregating to only around INR 1.11 billion Monday, as issuers await more favourable funding conditions, dealers said. Tuesday, bond issuances in the primary market, although higher than Monday at INR 5.79 billion, will still be low. SMFG India Credit Co. plans to raise INR 5 billion through a five-year bond. Pradhaan City K R Puram and Kanakadurga Finance will also raise funds through bonds.

 

Issuers continued to stay on the sidelines as higher borrowing costs kept supply thin. "Issuers are waiting for the yield in the government bond market to come down slightly, so that they can raise at lower borrowing costs," the dealer quoted above said.

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 9.60 million were traded at a weighted average yield of 6.0436-7.2473%, according to data from the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 4.60 million of Tamil Nadu's 7.74%, 2032 bond was dealt at a weighted average yield of 7.0545%

* INR 3.00 million of Tamil Nadu's 7.74%, 2026 bond was dealt at a weighted average yield of 6.0436%

* INR 2.00 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at a weighted average yield of 7.2473%

 

BENCHMARK LEVELS FOR CORPORATE BONDS: 

 

Tenure	MONDAY	FRIDAY
Three-year	6.91-6.95%	6.88-6.91%
Five-year	7.00-7.05%	6.99-7.02%
10-year	7.16-7.22%	7.13-7.17%

 

End

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

 

Edited by Saji George Titus

 

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