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Informist, Monday, Sept. 15, 2025

By Ketaki Patil

MUMBAI – Corporate bond yields remained steady in the secondary market on Monday, with most market participants adopting a cautious approach and limiting their activity to meeting basic portfolio requirements, dealers said. Demand from banks was matched by supply from mutual funds, which kept yields stable. However, pension funds continued to seek buyers for longer-tenure papers but in very thin volume, they said. 

"There were not many buyers or trades seen beyond the three-year segment...and there was lack of activity in longer-tenure papers which kept the market dull," a dealer at a mid-sized brokerage said. Dealers said there were no clear cues to place aggressive bets, leading to subdued trading activity.

Market participants are waiting for the US Federal Reserve's interest rate decision this week, which is expected to provide some direction to the market. On the other hand, other traders said they don't anticipate a significant impact from the US Fed decision, as market expectations are already factored in, but they are closely monitoring the outcome for further clarity. "I think we are waiting for the Fed policy rate (outcome), so let's see what happens then," said the dealer quoted earlier.

The US Federal Open Market Committee is widely expected to cut the Federal funds rate by 25 basis points at the meeting. According to the CME FedWatch Tool, 96.4% of market participants expect the central bank to reduce the key interest rates by 25 bps.

In the secondary market, deals aggregating to INR 106.39 billion were recorded on the National Stock Exchange and BSE combined on Monday, slightly lower than INR 108.39 billion Friday. Mutual funds and pension funds were active in longer tenures but in light volume on both the buying and selling side, dealers said. Banks and insurance companies bought shorter-tenure bonds.

Papers issued by Kerala Infrastructure Investment Fund Board, Muthoot Fincorp Ltd., Adani Enterprises Ltd., Navi Finserv Ltd., National Bank For Agriculture And Rural Development, Telangana State Industrial Infrastructure Corp. Ltd., Power Finance Corp. Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., Akara Capital Advisors Pvt Ltd., and Keertana Finserv Pvt Ltd. were traded the most Monday.

In the primary market, issuances aggregating 7.65 bln rupees were lined up, but were not confirmed till the time of reporting. On Tuesday, no bond issueance are lined up, dealers told Informist. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 27.00 million were traded at a weighted average yield of 6.3646-6.9666%, according to data from the RBI's Negotiated Dealing System-Order Matching System Monday.

* INR 12.00 million of Andhra Pradesh's 7.35%, 2030 bond was dealt at a weighted average yield of 6.9666%

* INR 10.00 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at a weighted average yield of 6.6519%

* INR 5.00 million of Uttar Pradesh's 8.14%, 2026 bond was dealt at a weighted average yield of 6.3646%

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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