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Informist, Thursday, Oct. 9, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds ended steady Thursday as traders stayed on sidelines due to lack of funds after the overnight variable rate reverse repo auction conducted by the Reserve Bank of India earlier in the day, dealers said. The RBI accepted all bids worth INR 468.60 billion at the INR-500-billion, overnight variable rate reverse repo auction. The RBI absorbed INR 1.29 trillion worth of liquidity from the banking system Wednesday--which is a proxy for systemic liquidity surplus--lower than INR 1.48 trillion on Tuesday. Additionally, some mutual funds refrained from taking aggressive bets due to redemption pressure, they said.

"There were not much trades today (Thursday)...as we did not see many participants trading aggressively, some big mutual funds did not have enough cash to buy due to redemption pressure," a dealer at a mid-sized brokerage said. "People tend to withdraw money from mutual funds during the festive season. And there was also VRRR today therefore banks were also not placing today (Thursday) that aggressive bets as they (banks) did not have ample cash today(Thursday), unlike yesterday (Wednesday)." 

In the secondary market, deals aggregating to INR 79.78 billion were recorded on the National Stock Exchange and BSE combined as of 1500 IST, significantly lower than INR 114.29 billion Wednesday. Mutual funds and banks were active in shorter trades but in very low volume. Insurance companies, along with a handful of pension funds, were active buyers in the longer tenure. "Overall trade volume was very low today (Thursday), who ever tapped the market it was just requirement-based," the dealer quoted above said.

Papers issued by Kerala Infrastructure Investment Fund Board, Muthoot Fincorp Ltd., Telangana State Industrial Infrastructure Corp. Ltd., Power Finance Corp. Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., Navi Finserv Ltd., and Vivriti Capital Ltd. were traded the most on bourses. 

On Thursday, primary market activity had slightly picked up with bond issuances aggregating to INR 22.00 billion, compared to issues worth INR 14.60 billion on Wednesday. On Friday, issuances aggregating to INR 38.35 billion are scheduled. Piramal Finance Ltd. has invited bids to raise funds through the issuance of the October 2027 bond, while Bajaj Housing Finance Ltd. has invited bids to raise funds through January 2028 bonds. Nuvama Wealth And Investment Ltd. and Progfin Pvt. Ltd., Clix Capital Services Pvt. Ltd., and Akara Capital Advisors Pvt. Ltd. are also scheduled to tap the corporate debt market Friday.

Merchant bankers believe that primary market activity will pick up in near future as some non-banking financial companies and real estate developers has received board approval to raise capital through bond issuances. They also said that some corporates are undergoing discussion to tap corporate bond market and will be announced on electronic bidding platform.

Some issuers are waiting for yields to come down further to borrow capital through the issuances as they are abstaining from paying high coupons, dealers said. "We are expecting issuances to pick up in this month," a fund manager at a mutual fund house said. "Until last week, levels were high, so no one wanted to issue bonds, issuers were waiting for levels to come down and settle... now it (coupon rates) is lucrative for them (issuers)."

UDAY BONDS

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In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 61.60 million were traded at a weighted average yield of 6.4666-6.9288%, according to data on the RBI's Negotiated Dealing System-Order Matching System Thursday.

* INR 25.20 million of Uttar Pradesh's 8.71%, 2028 bond was dealt at a weighted average yield of 6.8967%

* INR 15.50 million of Tamil Nadu's 7.75%, 2028 bond was dealt at a weighted average yield of 6.4952%

* INR 10.00 million of Punjab's 8.66%, 2028 bond was dealt at a weighted average yield of 6.8496%

* INR 4.50 million of Rajasthan's 8.19%, 2026 bond was dealt at a weighted average yield of 6.4666%

* INR 4.40 million of Rajasthan's 8.39%, 2026 bond was dealt at a weighted average yield of 6.8468%

* INR 2.00 million of Jharkhand's 8.72%, 2031 bond was dealt at a weighted average yield of 6.9288%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

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

Edited by Deepshikha Bhardwaj

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