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Informist, Friday, Oct. 10, 2025

By Ketaki Patil

MUMBAI – Yields on corporate bonds ended steady Friday as traders refrained from taking aggressive positions in the absence of domestic or global cues, dealers said. Over the past week, corporate bond yields have already softened by around 8-12 basis points across maturities, making investors cautious of taking any further bets, they said. Even though liquidity improved following the Reserve Bank of India's variable rate repo operation, market participants said the effect was already priced in, leaving little room for yields to ease further.

"The market has already rallied quite a bit in the last few days, so traders are just taking any further aggressive bets," a fund manager at a big-sized mutual fund house said. "Liquidity is comfortable after the VRR, but that's already factored in...there isn't any fresh trigger for yields to fall further."

Market participants expect yields in the secondary market to remain in a narrow band till the time some major issuance happens in the primary market, dealers said. Merchant bankers expect a few large issuers to tap the primary market, which will provide some cues to secondary market. "We are expecting some big state-owned banks and major PSUs (public sector undertakings) to tap the bond market," the fund manager quoted above said. 

In the secondary market, deals aggregating to INR 100.08 billion were recorded on the National Stock Exchange and BSE combined, significantly higher than INR 79.78 billion Thursday. Mutual funds traded across tenures, while banks were active in the shorter tenures. A few insurance companies, along with a handful of pension funds, were active traders in the longer tenure. "Although better than yesterday (Thursday), volume was still lower in the market (secondary) today (Friday)," a dealer at a brokerage said.

Papers issued by Kerala Infrastructure Investment Fund Board, Navi Finserv Ltd., Telangana State Industrial Infrastructure Corp. Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., and Indian Railway Finance Corp. Ltd., were traded the most on bourses Friday. 

On Friday, primary market activity had slightly picked up with bond issuances aggregating to INR 38.35 billion, compared to issues worth INR 22.00 billion on Thursday. On Monday, issuances aggregating to INR 30.75 billion are scheduled. Cholamandalam Investment and Finance Co. Ltd. has invited bids to raise funds through the issuance of the five-year bonds, while SMFG India Home Finance Co. Ltd. has invited bids to raise funds through October 2028 bonds. Kotak Mahindra Prime Ltd. and Aditya Birla Housing Finance Ltd., Navi Finserv Ltd., Afcons Infrastructure Ltd., and Asirvad Micro Finance Ltd., Kisetsu Saison Finance (India) Pvt. Ltd. are also scheduled to tap the corporate debt market.

The outlook for the primary corporate bond market remains positive, dealers said. Market participants said the recent supply is largely requirement-based or for current refinancing needs, therefore the quantum of these bonds is not that large. Dealers said that primary market activity is expected to pick up in mid-October. 

"Most of the issuances in the primary market are completely requirement-based right now," the dealer quoted above said. "Most of the upcoming issuances are arranger-led, and since yields have softened a bit, issuers are tapping the market right now, yet the quantum is very low."

UDAY BONDS

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In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 7 million were traded at a weighted average yield of 5.8470-6.9200%, according to data on the RBI's Negotiated Dealing System-Order Matching System Thursday.

* INR 5.00 million of Uttar Pradesh's 8.14%, 2026 bond was dealt at a weighted average yield of 5.8470%

* INR 2.00 million of Jharkhand's 8.72%, 2031 bond was dealt at a weighted average yield of 6.9200%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Tanima Banerjee

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