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Informist, Friday, Sept. 5, 2025

By Vaishali Tyagi and Ketaki Patil

MUMBAI – Yields on corporate bonds in the secondary market moved in a narrow range Friday due to muted trading activity, dealers said. They attributed the subdued volumes to requirement-based trades and investors having limited cash to invest. 

Dealers said mutual funds bought aggressively on Thursday due to uncertainty about Friday being a holiday for Id-e-Milad after the Maharashtra government rescheduled the holiday to Monday. However, confirmation from the Reserve Bank of India about money markets being open on Friday came post market hours. 

"See, barely any quotes came today (Friday) and that is seen from volumes also...rarely any trade took place," a fund manager at a mutual fund house said. "Most of the market participants deployed their cash on Thursday assuming Friday was holiday; by the time clarification came, most trades were done." 

In the secondary market, deals aggregating INR 39.36 billion were recorded as of 1500 IST on the National Stock Exchange and BSE combined Friday, significantly lower than INR 95.79 billion on Thursday. Mutual funds, along with a handful of insurance companies, bought in light volume in shorter tenure, dealers said. Banks, pension funds and corporate entities were absent from the market. "We saw some insurance companies and mutual funds buying selective papers of shorter tenures," said the fund manager quoted earlier. 

Papers issued by National Bank for Agriculture and Rural Development, Kerala Infrastructure Investment Fund Board, The Andhra Pradesh Mineral Development Corp. Ltd., Krazybee Services Pvt Ltd., Akara Capital Advisors Pvt. Ltd., Muthoottu Mini Financiers Ltd., Sammaan Capital Ltd., and Telangana State Industrial Infrastructure Corp. Ltd., were traded the most Friday.

In the primary market, activity remained muted with a single bond issuance by Keertana Finserv Pvt. Ltd., to raise up to INR 800 million through April 2028 bonds. However, the deal was not confirmed till the time of writing this report. Issuers are waiting for more favourable conditions to raise funds through the corporate debt market, dealers said. On Monday, bond issuances aggregating to INR 23.00 billion are lined up – Poonawalla Fincorp Ltd. plans to raise up to INR 15 billion and 360 One Prime Ltd. will raise INR 5.00 billion through their respecive bond issuances. IIFL Finance is also expected to raise funds through bonds.

Dealers said there is a significant slowdown in corporate bond market activity due to rising yields. However, merchant bankers say primary market activity will revive towards the end of the September quarter.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 3.00 million were traded at a weighted average yield of 6.5177-7.3824%, according to data from the RBI's Negotiated Dealing System-Order Matching System Friday.

* INR 2.00 million of Madhya Pradesh's 8.05%, 2029 bond was dealt at a weighted average yield of 7.3824%

* INR 1.00 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at a weighted average yield of 6.5177%

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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