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Informist, Tuesday, Oct. 7, 2025

 

By Ketaki Patil

 

MUMBAI – Yields on corporate bonds ended lower Tuesday as traders continued to buy bonds on the expectation of a 25-basis point repo rate cut by the Reserve Bank of India's Monetary Policy Committee in the coming months, dealers said. RBI Governor Sanjay Malhotra Wednesday said that policy space has opened up for further easing in rates. The sentiment in the market has improved as investors expect interest rates to move lower, prompting them to lock in high-yielding papers before yields fall further, they said.

 

Dealers said the fall in yields Tuesday was largely driven by sustained buying in the secondary market and as there were no negative triggers to reverse the trend. "Yields have gone down 3-4 basis points as traders are buying due to the positive outlook of the MPC and no fresh triggers," a fund manager at a mutual fund house said. "It (fall in yields) always takes time. It is a gradual process as impact is not limited to a day or two after the MPC outcome therefore...yields move down a little everyday consistently for a few days."

 

In the secondary market, deals aggregating to INR 147.67 billion were recorded on the National Stock Exchange and BSE combined, significantly higher than INR 87.35 billion on Monday.  Mutual funds and banks were active on both buying and selling sides across tenures. Pension funds were active on the buying side, while insurers sold papers.

 

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., Indian Railways Finance Corp. Ltd., REC Ltd., and Vivriti Capital Ltd. were traded the most.

 

On Tuesday, bond issuances aggregating to INR 10.23 billion were lined up. On Wednesday, issuances aggregating to INR 14.60 billion are scheduled. HDB Financial Services has invited bids to raise funds by reissuing the September 2028 bond, while Nuvama Wealth Finance Ltd. has invited bids to raise funds through December 2027 bonds. SK Finance Ltd., Conmin Projects India Pvt. Ltd., and Hinduja Leyland Finance Ltd. are also scheduled to tap the corporate debt market Wednesday.

 

Primary bond market continues to be comparatively subdued, with few deals hitting the electronic bidding platform so far. However, dealers expect activity to pick up in the coming days as several non-banking financial companies are preparing to raise funds. "There are fewer deals that have come on the bidding platform, but there are many deals which have happened and will be announced on the EBP (electronic bidding platform) in the next two–three days as many NBFCs are looking to borrow," the fund manager quoted above said.

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating INR 49.00 million were traded at a weighted average yield of 6.5605-7.1634%, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 30.00 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at a weighted average yield of 6.5605%

* INR 9.20 million of Uttar Pradesh's 8.77%, 2028 bond was dealt at a weighted average yield of 6.8996%

* INR 7.00 million of Telangana's 7.96%, 2032 bond was dealt at a weighted average yield of 7.1634%

* INR 2.80 million of Tamil Nadu's 7.75%, 2031 bond was dealt at a weighted average yield of 6.9000%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	TUESDAY	MONDAY
Three-year	6.68-6.72%	6.73-6.74%
Five-year	6.86-6.91%	6.89-6.94%
10-year	7.12-7.15%	7.17-7.18%

 

End

 

Edited by Ashish Shirke

 

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