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Informist, Thursday, Sept. 18, 2025

By Ketaki Patil

MUMBAI – Yields in the corporate bond secondary market closed steady on Thursday, continuing the subdued trend this week, with trading activity limited to requirement-based deals, dealers said. Market participants remained cautious and awaited cues from fresh primary market supply, they said.

"There is not much movement in the secondary market...people are only trading based on their requirement, and most traders are waiting for a big size issue from any PSU (public sector undertaking) or bank to come and tap the primary market," a dealer at a big brokerage said. "If Numaligarh's (Numaligarh Refinery) issue is successful, it may set the tone for other names to follow."

Numaligarh Refinery Ltd. has invited bids to raise up to INR 50.00 billion through the issuance of 10-year bonds maturing on Sept. 23, 2035, on Monday. The issue has a base size of INR 10.00 billion and a greenshoe option of INR 40.00 billion.

The secondary market of corporate bonds remained unaffected by the US Federal Reserve's 25-basis-point rate cut decision on Wednesday, as this was largely anticipated. The Fed's dot plot indicating two more rate cuts also failed to lead to significant activity. The US Federal Open Market Committee on Wednesday voted to reduce the federal funds rate target range by 25 basis points to 4.00-4.25%, after keeping it steady for five consecutive meetings. In the statement of economic projections, the US Federal Reserve officials guided for the federal funds target rate to be at 3.50-3.75% by the end of this year, which is 50 bps lower than the current rate.

Market participants attributed steady yields to the absence of redemption pressure on mutual funds and long-term investors, which leads to selling and pushes yields higher, especially around the quarter-end. With no such pressure currently, yields have remained stable. "Daily requirements are being met and there is no redemption pressure also...which is keeping the yields stable," said the dealer quoted earlier. "There is no attractive new issues in the primary market, worth switching into," a dealer said.

Overall low activity in the secondary market pushed volumes down. Deals aggregating to INR 84.67 billion were recorded on the National Stock Exchange and BSE combined on Thursday, higher than INR 133.68 billion Wednesday. Mutual funds were active on both the buying and selling sides, along with a handful of insurance and pension funds. 

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., National Bank For Agriculture And Rural Development, Telangana State Industrial Infrastructure Corp. Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., Sammaan Capital Ltd., and Krazybee Services Pvt Ltd. were traded the most.

On Thursday, bond issuances worth INR 38.30 billion were planned in the primary market. Aditya Birla Housing Finance raised INR 5 billion through bonds maturing on Sept. 7, 2028. On Friday, bond issuances aggregating INR 2.25 billion are scheduled, lower compared to Thursday's activity. Navi Finserv Ltd. plans to raise up to INR 2.00 billion through bonds maturing Dec. 31, 2030. Akara Capital Advisors Pvt. Ltd. has invited bids to raise funds through zero-coupon bonds.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 10.00 million were traded at a weighted average yield of 6.4622-7.0501%, according to data from the RBI's Negotiated Dealing System-Order Matching System Wednesday.

* INR 5.00 million of Uttar Pradesh's 8.38%, 2027 bond was dealt at a weighted average yield of 6.4622%

* INR 5.00 million of Tamil Nadu's 7.74%, 2031 bond was dealt at a weighted average yield of 7.0501%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Avishek Dutta

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