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Informist, Tuesday, Sept. 23, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds ended steady in the secondary market Tuesday as traders focussed on top-rated issuances of state-owned entities, dealers said. Despite selective buying by pension funds and insurance companies, yields in the secondary market remained unchanged from Monday.

"Overall, bond yields decreased by 3-4 basis points in the high-rated bond segment, driven by buying activity from insurance and pension funds in the 4-10-year tenure," a dealer at a large state-owned insurance company said. "But, bonds of National Bank for Agriculture and Rural Development were (traded) at similar yield levels, while NTPC and NHAI (National Highways Authority of India) bonds experienced a slight decline due to demand. However, yields on most other papers remained largely stable, showing overall steady trend."

In the primary market, there were issuances aggregating INR 60.65 billion, including of two large state-owned companies. Power Finance Corp. Ltd. raised INR 34.50 billion through Oct. 15, 2027 bonds at a coupon of 6.73%. Rashtriya Chemicals and Fertilizers Ltd. raised INR 3.95 billion through Jul. 25, 2029 at a coupon of 7.60%.

"PFC's bond issue met with strong investor appetite, drawing bids of over INR 66 billion against the INR 35 billion target. The response reflects the market's confidence in PSU paper," Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap, said. "With long-tenor yields still on the higher side, PSUs (public sector undertakings) are increasingly opting for shorter tenor issuances which is well aligned with the surge in mutual fund demand at the shorter end of the curve."

On Wednesday, bond issuances aggregating to INR 88.90 billion are scheduled. NABARD plans to raise up to INR 70.00 billion through bonds maturing on Jan. 19, 2029. Godrej Seeds & Genetics will tap the market to raise up to INR 10.00 billion through separately transferable redeemable principal part bonds. HDB Financial Services Ltd. has invited bids to raise INR 5 billion through reissuance of Aug. 4, 2028 bonds. Apraava Renewable Energy Pvt. Ltd., Ugro Capital Ltd., Berar Finance Ltd., and Kisetsu Saison Finance (India) Pvt. Ltd. also plan to raise funds from the corporate bond market.

Merchant bankers said traders are looking for more clarity from the upcoming Monetary Policy Committee meeting next week. Traders are positive that the Reserve Bank of India's rate-setting committee will cut the repo rate at its upcoming meeting or signal a rate cut.

In the secondary market, deals aggregating INR 130.76 billion were recorded on the National Stock Exchange and BSE combined, significantly higher than INR 84.48 billion on Monday. Pension funds and insurance companies were buying across tenures, actively demanding bonds of state-owned entities. Mutual Funds were active but refrained from taking aggressive bets. Corporate entities remained absent.

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., Muthoot Capital Services Ltd., NABARD, Telangana State Industrial Infrastructure Corp. Ltd., The Andhra Pradesh Mineral Development Corp, Ltd., and Anand Rathi Global Finance Ltd. were traded the most Tuesday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 104 million were traded at a weighted average yield of 6.1999-6.3211%, according to data from the RBI's Negotiated Dealing System-Order Matching System Tuesday.

* INR 100.00 million of Rajasthan's 8.39%, 2026 bond was dealt at a weighted average yield of 6.1999%

* INR 4.00 million of Tamil Nadu's 7.74%, 2026 bond was dealt at a weighted average yield of 6.3211%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Ashish Shirke

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