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Informist, Friday, Sept. 26, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds in the secondary market closed 1-2 basis points lower across tenures on Friday, driven by buying activity from banks and mutual funds, dealers said. Traders bought bonds to lock in higher yields ahead of the upcoming Reserve Bank of India's Monetary Policy Committee meeting next week, where they anticipate a rate cut. They added papers across all tenures to their portfolios, they said.

"Mutual funds were actively adding positions today (Friday), particularly in the 3-10 year segment of the corporate bond market," a dealer at a brokerage firm said. "Traders are positioning themselves ahead of the MPC meeting, expecting to add higher-yielding papers as they anticipate a decline in borrowing costs in the future."

Dealers expect secondary market activity to stay in a thin band in the near term, as investors are divided on the policy rate decision, leading to cautious trading ahead of the policy announcement. "Flows will be two-way, but buying interest from mutual funds and banks is likely to keep yields slightly lower, though yields will stay within a narrow range," the dealer quoted above said.

On Friday, bond issuances aggregating INR 27.10 billion were lined up. Bajaj Finance Ltd. raised INR 15.55 billion through the issuance of Sept. 30, 2030 bond at a 7.37% coupon.

On Monday, bond issuances aggregating INR 144.00 billion are scheduled. JTPM Metal Traders Ltd., an investment holding company of JSW Group has invited bids to raise INR 70.00 billion through the issuance of zero-coupon bonds maturing on Apr. 30, 2030. LIC Housing Finance Ltd. will tap the market to raise up to INR 20.00 billion through a Aug. 27, 2028 bond. DLF Cyber City Developers Ltd. plans to raise INR 11.00 billion and Sundaram Finance Ltd. will raise INR 5.00 billion. Axis Finance Ltd., Lodha Developers Ltd., Toyota Financial Services India Ltd., IIFL Finance Ltd., and several others plan to raise funds. 

Issuers are locking in funds now to avoid higher coupons later, dealers said. "Issuers do not want to take any chance...even if the MPC doesn't cut, demand is strong right now, so it makes sense to tap the market early," the dealer quoted above said.

In the secondary market, deals aggregating INR 119.15 billion were recorded on the National Stock Exchange and BSE combined on Friday, slightly lower than INR 158.88 billion Thursday. Mutual funds, along with handful of corporate entities were active on both buying and selling sides, across tenures. Banks aggressively bought papers across tenures while pension funds bought longer tenure papers, dealers said.

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., Bajaj Finance Ltd., National Bank For Agriculture And Rural Development, Telangana State Industrial Infrastructure Corp. Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., Anand Rathi Global Finance Ltd., and Sammaan Capital Ltd., were traded the most Friday. 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 55.20 million were traded at a weighted average yield of 6.5359-7.0970%, according to data from the RBI's Negotiated Dealing System-Order Matching System Friday.

* INR 44.00 million of Uttar Pradesh's 8.75%, 2030 bond was dealt at a weighted average yield of 6.6512%

* INR 6.60 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at a weighted average yield of 6.5359%

* INR 4.60 million of Tamil Nadu's 7.74%, 2032 bond was dealt at a weighted average yield of 7.0970%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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