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Informist, Wednesday, Oct. 8, 2025

 

By Ketaki Patil

 

MUMBAI – Yields on corporate bonds ended lower Wednesday as traders rushed to buy bonds across tenures to deploy their funds amid ample liquidity in the system, dealers said. On Tuesday, the RBI net absorbed INR 1.48 trillion worth of liquidity from the banking system, a proxy for systemic liquidity surplus. Dealers also attributed traders' continued buying of bonds on the expectation of a 25-basis-point repo rate cut by the Reserve Bank of India's Monetary Policy Committee in December. On Oct. 1, RBI Governor Sanjay Malhotra said that policy space has opened up for further easing in rates.

 

Despite the policy announcement having taken place days ago, sentiment in the market remains positive, dealers said. "People are just bullish about the near future and they (traders) are sitting with cash which is resulting in excessive demand of bonds....that's the reason I would say yields are lower and buying is also being supported by ample liquidity," a dealer at a brokerage firm said. "Traders and mutual fund houses continue to buy bonds aggressively to lock in higher returns before yields decline further."

 

In the secondary market, deals aggregating to INR 114.29 billion were recorded on the National Stock Exchange and BSE combined, significantly lower than INR 147.67 billion Tuesday. Mutual funds and banks were active on both buying and selling sides across tenures. A few pension funds and insurance companies were active buyers in the shorter tenure.

 

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

 

On Wednesday, primary market activity remianed subdued with bond issuances aggregating to INR 14.60 billion. On Thursday, issuances aggregating to INR 22.00 billion are scheduled. L&T Finance Ltd. has invited bids to raise funds through the issuance of the November 2028 bond, while Jio Credit Ltd. has invited bids to raise funds through October 2027 bonds. Aseem Infrastructure Finance Ltd. and Keertana Finserv Ltd. are also scheduled to tap the corporate debt market Thursday.

 

"Corporates are looking to refinance, but they wanted coupon rates to be lower, right now the (coupon) rates seems good for issuers," the dealer quoted above said. "So, they were not tapping earlier, but now we expect more corporates to tap in near future."

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 94.60 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 Wednesday.

 

* INR 15.50 million of Tamil Nadu's 7.75%, 2028 bond was dealt at a weighted average yield of 6.5012%

* INR 12.90 million of Rajasthan's 8.39%, 2026 bond was dealt at a weighted average yield of 7.4345%

* INR 12.50 million of Rajasthan's 8.19%, 2026 bond was dealt at a weighted average yield of 7.5234%

* INR 10.80 million of Haryana's 8.21%, 2026 bond was dealt at a weighted average yield of 7.1443%

* INR 9.20 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at a weighted average yield of 6.8967%

* INR 7.00 million of Telangana's 7.96%, 2032 bond was dealt at a weighted average yield of 7.1611%

* INR 5.60 million of Tamil Nadu's 8.24%, 2028 bond was dealt at a weighted average yield of 7.2510%

* INR 5.30 million of Tamil Nadu's 7.78%, 2026 bond was dealt at a weighted average yield of 7.1183%

* INR 5.00 million of Uttar Pradesh's 8.42%, 2027 bond was dealt at a weighted average yield of 7.4321%

* INR 5.00 million of Telangana's 7.81%, 2027 bond was dealt at a weighted average yield of 7.3619%

* INR 3.00 million of Uttar Pradesh's 8.35%, 2029 bond was dealt at a weighted average yield of 7.2702%

* INR 2.80 million of Tamil Nadu's 7.75%, 2031 bond was dealt at a weighted average yield of 6.8974%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	WEDNESDAY	TUESDAY
Three-year	6.67-6.71%	6.68-6.72%
Five-year	6.83-6.85%	6.86-6.91%
10-year	7.10-7.15%	7.12-7.15%

 

End

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

 

Edited by Tanima Banerjee

 

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