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Informist, Wednesday, Sept. 3, 2025

By Vaishali Tyagi

MUMBAI – Corporate bond yields in the secondary market moved in a narrow range Wednesday, as traders focused on need-based trade, dealers said. "See, traders were active in the market and quotes (rates to buy) were coming but the quantum was low," a dealer at a mid-sized brokerage firm said. "Participants from all segments were trading papers across various tenures but yields did not move much." 

During the day, yields in the corporate bond market rose slightly before settling near Tuesday's levels. Most market participants adopted a cautious stance and refrained from taking significant positions. The limited activity was primarily driven by specific buyer and seller requirements, with only a few participants actively trading. Overall, there is a wait-and-watch approach among traders. 

Dealers noted that mutual funds have been the most active participants in the market over the past few sessions, trading various papers to book profits. In contrast, banks have shown limited activity, having already invested in state bonds at a recent auction. Pension funds and insurance companies have also been selective, only participating in the market for specific papers that meet their requirements. "Mutual funds are most active these days to book profits while banks' appetite has gone down after they invested in state bonds at the hefty auction on Saturday," said the dealer quoted earlier.

On Tuesday, 12 states raised INR 290.83 billion at the auction, against the notified amount of INR 316.50 billion, with Maharashtra and Tamil Nadu rejecting bids for bonds maturing in around 30 years.

In the secondary market, deals aggregating to INR 144.61 billion were recorded on the National Stock Exchange and BSE combined, higher than INR 123.35 billion at the same time on Tuesday. Mutual funds were seen active on the selling side, along with a handful of banks, dealers said. Insurance companies, pension funds and corporate enities were absent from the market on Wednesday.

Papers issued by State Bank of India, LIC Housing Finance, Power Finance Corp. Telangana State Industrial Infrastructure Corp., 360 One Prime, National Bank For Agriculture And Rural Development, Bajaj Housing Finance and Small Industries Development Bank Of India were the most traded papers on exchanges on Wednesday.

In the primary market, activity remained muted with issuances aggregating to only around INR 6.0 billion Wednesday, as issuers await more favourable conditions to raise funds through the corporate debt market, dealers said.

On Thursday, bond issuances aggregating to INR 2.8 billion are lined up – Marwadi Shares And Finance Ltd. plans to raise INR 2.5 billion and Shri Ram Finance Corp. Pvt. Ltd will raise INR 300 million through their respecive bond issuances. Dealers said there is an overall slowdown in corporate bond activity due to a rise in yields. "Some of the issuers are waiting for yields to cool down, and that's when they (issuers) may come to issue their paper at those lower levels," said the dealer quoted above.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 95.0 million were traded at a weighted average yield of 6.0317-7.7139%, according to data from the RBI's Negotiated Dealing System-Order Matching System Wednesday.

* INR 25.20 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at a weighted average yield of 6.7421%

* INR 13.00 million of Uttar Pradesh's 8.38%, 2027 bond was dealt at a weighted average yield of 6.5872%

* INR 13.00 million of Uttar Pradesh's 8.70%, 2027 bond was dealt at a weighted average yield of 6.6103%

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at a weighted average yield of 6.8939%

* INR 10.0 million of Punjab's 8.66%, 2028 bond was dealt at a weighted average yield of 6.7418%

* INR 7.50 million of Chhattisgarh's 8.70%, 2031 bond was dealt at a weighted average yield of 6.9955%

* INR 5.0 million of Telangana's 8.04%, 2031 bond was dealt at a weighted average yield of 7.7139%

* INR 3.0 million of Uttar Pradesh's 8.49% , 2028 bond was dealt at a weighted average yield of 7.3975%

* INR 2.50 million of Tamil Nadu's 7.75%, 2028 bond was dealt at a weighted average yield of 6.6911%

* INR 2.00 million of Tamil Nadu's 7.74%, 2031 bond was dealt at a weighted average yield of 6.9956%

* INR 1.00 million of Tamil Nadu's 7.74%, 2026 bond was dealt at a weighted average yield of 6.0317%

* INR 1.00 million of Tamil Nadu's 7.78%, 2031 bond was dealt at a weighted average yield of 7.0957%

* INR 0.50 million of Tamil Nadu's 7.77%, 2030 bond was dealt at a weighted average yield of 6.841%

BENCHMARK LEVELS FOR CORPORATE BONDS: 

End

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

Edited by Avishek Dutta

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