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Informist, Friday, Oct. 3, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds in the secondary market ended down Friday as traders across segments bought paper on expectation of additional liquidity into system following the Reserve Bank of India's second tranche cut in the cash reserve ratio, dealers said. The monetary policy outcome, which left room for rate cuts in the coming months, also supported buying in the shorter tenure, they said. 

The systemic liquidity surplus is likely to rise further Saturday as a 25-basis-point cut in the cash reserve ratio will come into effect. This will be the second 25-bps cut in the CRR, of the 100-bps of cut announced in June, and will bring down the CRR to 3.50% of banks' net demand and time liabilities.

At the outcome of the MPC meeting Wednesday, the rate-setting panel left the policy repo rate unchanged at 5.50%. However, the RBI Governor Sanjay Malhotra's commentary hinted that the Monetary Policy committee was open to cutting rates further. 

"There was a decent amount of buying today (Friday) because of good cash flow with traders and they are hopeful of more liquidity will be into the system on Saturday because of the CRR cut and a supportive tone for rate cut from the policy, investors preferred the shorter end of the curve," a dealer at a brokerage firm said.

In the secondary market, deals aggregating INR 88.27 billion were recorded on the National Stock Exchange and BSE combined on Friday, significantly lower than INR 101.30 billion on Wednesday. Money markets were shut on Thursday on account of Gandhi Jayanti. Mutual funds and pension funds aggressively bought papers on shorter-end of the curve. Banks also traded (bought and sold) papers across tenures. Corporates and insurance companies were also present in the market in shorter tenure. Trading activity in longer tenure remained subdued. 

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., Telangana State Industrial Infrastructure Corp. Ltd., Sammaan Capital Ltd., Vivriti Capital Ltd., UGRO Capital Ltd., and National Bank For Agriculture And Rural Development were traded the most Friday. 

Friday, activity in the primary market remained dull. Only one issuer, Keertana Finserv Ltd., tapped the market to raise funds aggregating to INR 400 million, but the deal was not confirmed till the time of reporting.

On Monday, bond issuances aggregating INR 6.75 billion are scheduled. 360 ONE Prime Ltd. has invited bids to raise INR 5.00 billion through the issuance of two-year bonds. Vedika Credit Capital Ltd. will raise up to INR 400 million through issuance of two bonds of different maturities. Akara Capital Advisors Pvt. Ltd. will raise funds through December 2028 bonds. Ambium Finserve Ltd. will tap the market to raise funds through December 2026 bonds.  

Rising acquisition financing and fundraising by state-owned entitity is expected to boost primary market activity, dealers said. Since rates have come down, a few non-banking financial companies may tap the corporate debt market. "We expect issuances from NBFCs and some PSUs next week," a dealer at another brokerage firm said. "Generally, second half of the year is busy and large corporate funds are expected to mobilise funds through corp (corporate) bonds."

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 102.30 million were traded at a weighted average yield of 6.4262-7.1242%, according to data from the RBI's Negotiated Dealing System-Order Matching System on Friday.

* INR 25.20 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at a weighted average yield of 6.6561%

* INR 13.00 million of Uttar Pradesh's 8.70%, 2027 bond was dealt at a weighted average yield of 6.4262%

* INR 13.00 million of Uttar Pradesh's 8.38%, 2027 bond was dealt at a weighted average yield of 6.4379%

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at a weighted average yield of 6.5859%

* INR 10.00 million of Punjab's 8.66%, 2028 bond was dealt at a weighted average yield of 6.6575%

* INR 9.00 million of Tamil Nadu's 7.74%, 2031 bond was dealt at a weighted average yield of 7.0457%

* INR 7.50 million of Chattisgarh's 8.70%, 2031 bond was dealt at a weighted average yield of 7.0299%

* INR 5.00 million of Jammu and Kashmir's 8.48%, 2029 bond was dealt at a weighted average yield of 6.7846%

* INR 2.50 million of Tamil Nadu's 7.75%, 2028 bond was dealt at a weighted average yield of 6.4986%

* INR 2.50 million of Tamil Nadu's 8.04%, 2029 bond was dealt at a weighted average yield of 6.7848%

* INR 1.80 million of Tamil Nadu's 7.74%, 2032 bond was dealt at a weighted average yield of 7.1242%

* INR 1.00 million of Tamil Nadu's 7.78%, 2031 bond was dealt at a weighted average yield of 7.0186%

* INR 500,000 of Tamil Nadu's 7.77%, 2030 bond was dealt at a weighted average yield of 6.7655%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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