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Informist, Monday, Sept. 22, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds in the secondary market ended largely steady Monday as participants shifted their focus on primary market as key marquee issuers will tap the bond market this week, dealers said. They said these large bond issuances will provide direction to spreads in the secondary market this week.

"Some activity was there as some mutual funds were present on both the buy and sell side (in secondary market) and traded papers according to their requirements, as most of the traders remained focused on primary market," a dealer at a brokerage firm said. "Insurance companies and pension funds were also present on the selling side but in limited volume."

Earlier in the day, yields fell slightly in the secondary market, but some selling happened post the announcement of National Bank for Agriculture and Rural Development's bond issuance, which shifted the yields to their previous levels, keeping the market flat. "After NABARD announcement, we saw levels holding flat," the dealer quoted above said.

In primary Tuesday, bond issuances aggregating INR 60.65 billion will tap primary debt market. Power Finance Corp. Ltd. plans to raise up to INR 35.00 billion through bonds maturing in Oct. 15, 2027. Rashtriya Chemicals And Fertilizers will tap the market to raise up to INR 4.00 billion through bonds maturing Jul. 25, 2029.

"Supply in primary market was long due...and has been dull for some time now," the dealer quoted above said. "Once NABARD issuance happens, other PSUs (public sector undertakings) are likely to follow quickly," the dealer quoted above said. "Market participants expect a surge in corporate bond activity towards the end of the month." On Wednesday, National Bank for Agriculture and Rural Development has invited bids to raise up to INR 70.00 billion through issuance of bonds maturing on Jan. 19, 2029.

Aditya Birla Capital Ltd. has also invited bids to raise INR 10 billion through re-issuance of two bonds. Additionally, Aditya Birla Capital plans to raise up to INR 10 billion through fresh issuances of two bonds. Nuvama Wealth And Investment Ltd., Keertana Finserv Ltd. and Manba Finance Ltd. also plan to raise funds from the corporate bond market. 

On Monday, activity in the primary market picked up. Issuances aggregating to INR 66.25 billion were lined up today. Assam-based Numaligarh Refinery Ltd. raised INR 25.00 billion through 10-year bond at a coupon of 7.34%. 

In the secondary market, overall low participation pushed the volume down. Deals aggregating INR 84.48 billion were recorded on the National Stock Exchange and BSE combined Monday, significantly lower than INR 118.25 billion on Friday. Banks were present on buying and selling side. Pension funds were active on the selling side. Insurance companies sold some bonds but refrained from participating in large volumes. Corporate entities remained largely absent.  

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., Sammaan Capital Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., and Vivriti Capital Ltd. were traded the most Monday. Merchant bankers said that there is no immediate redemption pressure in the market, but expect flows to pick up toward the end of the month. "Redemption-driven selling is not visible yet, but could emerge around Sept. 29–30," the dealer said.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 44.54 million were traded at a weighted average yield of 6.2478-7.1957%, according to data from the RBI's Negotiated Dealing System-Order Matching System Monday.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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