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Informist, Friday, Sept. 12, 2025

 

By Ketaki Patil

 

MUMBAI – Corporate bond yields ended steady Friday as limited supply in the primary market kept activity in the secondary market range-bound, dealers said. Yields across tenures did not move much compared to Thursday.

 

Dealers said that even though mutual funds and pension funds were active in some tenures, there wasn't enough momentum to shift levels. "The market is stable because there is no real movement in levels. I think because the levels are not lucrative for the buyer in the secondary market, they are not picking up the papers that pension funds want to sell," a dealer at a mid-sized brokerage said. On Thursday, dealers had said that while pension funds looked to sell they could not find buyers.

 

Lack of fresh issuances is weighing on sentiment, a fund manager from a private sector bank said. "There is not much supply of bonds. One or two auctions got rejected earlier as issuers felt the bids were too high. Since then, we have not seen many active auctions. A few PSUs (public sector undertakings) may come, but whether they will issue in September or wait until after the October policy, we do not know," a fund manager at a private sector bank said.

 

Market participants also linked the steady levels to recent adjustments in government securities yields. "G-secs had adjusted sharply in August. The market is still finding its feet, and maybe issuers also want to wait until they are more comfortable with the yield environment," the fund manager quoted above said.

 

In the secondary market, deals aggregating INR 108.39 billion were recorded on the National Stock Exchange and BSE combined on Friday, significantly higher than INR 43.04 billion on Thursday. Mutual funds and pension funds were active in longer tenures, on both the buying and selling side, dealers said. Banks and insurance companies bought shorter-tenure bonds while corporates were largely absent from the market.

 

Papers issued by Kerala Infrastructure Investment Fund Board, Muthoot Fincorp, Navi Finserv, Telangana State Industrial Infrastructure Corp., Andhra Pradesh Mineral Development Corp., Sammaan Capital, and Keertana Finserv, HDB Financial Services were traded the most.

 

In the primary market, deals aggregating to INR 39.80 billion were lined up but the deals were 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. Looking ahead, dealers said clarity will only emerge once large public sector issuances test the market. "Once we see one or two big PSU auctions getting cleared, then we will know whether the yield was the issue or the size of the issue. At this point, since there is no deal flow in the primary, it is difficult to say," the fund manager quoted above said.

 

On Monday, bond issuances aggregating INR 7.65 billion are lined up. Lodha Developers Ltd. plans to raise INR 3.50 billion and Krazybee Services Pvt. Ltd. up to INR 2.75 billion. Keertana Finserv Ltd. and Edel Finance Company Ltd. plan to raise funds from the corporate bond market through reissuance of their respective papers. Most of these bonds are short-term.

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 254.5 million were traded at a weighted average yield of 6.1500-7.0467%, according to data from the RBI's Negotiated Dealing System-Order Matching System Thursday.

 

* INR 250.0 million of Haryana's 8.18%, 2026 bond was dealt at a weighted average yield of 6.1500%

* INR 2.00 million of Jharkhand's 8.72%, 2031 bond was dealt at a weighted average yield of 7.0467%

* INR 1.50 million of Rajasthan's 8.19%, 2026 bond was dealt at a weighted average yield of 6.2235%

* INR 1.00 million of Uttar Pradesh's 8.70%, 2031 bond was dealt at a weighted average yield of 6.8572%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	FRIDAY	THURSDAY
Three-year	6.86-6.89%	6.84-6.86%
Five-year	6.99-7.05%	6.98-7.00%
10-year	7.17-7.20%	7.17-7.20%

 

End

 

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

 

Edited by Ashish Shirke

 

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