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Informist, Friday, Oct. 17, 2025

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds ended steady in the secondary market Friday as traders focussed on top-rated issuances of state-owned entities, dealers said. Despite selective buying by mutual funds and insurance companies, yields in the secondary market remained unchanged from Thursday.

"Overall, earlier in the day, bond yields fell 2-3 basis points on high-rated bonds as demand for these (AAA-rated bonds) surged after primary market issuances, driven by buying activity from insurance companies and mutual funds in the 4-10-year tenure," a dealer at a brokerage firm said. "However, yields on most other papers remained largely stable and all demand dried as the day passed, showing overall steady trend." 

Primary market activity remained robust Friday. In the primary market, there were three issuances aggregating INR 145.25 billion, including large-ticket issuances by state-owned entities, which raised an aggregate amount of INR 143.26 billion.

National Bank for Agriculture and Rural Development raised INR 68.26 through the reissuance of bonds maturing on Jan. 19, 2029, at a yield of 6.71%. The issue had a base size of INR 20 billion and a greenshoe option of INR 50 billion. According to the bid book accessed by Informist, the company received 140 bids aggregating INR 157.71 billion.

Another, big-ticket issuance was by State Bank of India, which raised INR 75 billion through 10-year Basel-III compliant tier-II bonds maturing on Oct. 20, 2035, at a coupon of 6.93%. This was the bank's first bond issuance in Apr-Mar (2025-26) to which it received a such a good response, dealers said. 

"The issue attracted an overwhelming response from investors with bids approximately three times against the base issue size of INR 50 billion," the bank said in a press release Friday. "The total number of bids received was 101 indicating participation from diverse set of qualified institutional bidders. The investors were across provident funds, pension funds, mutual funds, banks, etc," read the release.

In the secondary market, overall deals aggregating to INR 98.80 billion were reported on the National Stock Exchange and BSE combined Friday, significantly lower than INR 137.62 billion on Thursday. Mutual funds, along with a handful of insurance companies, were seen as active on the buying side, dealers said. Pension funds and banks were seen selling across tenures, actively demanding bonds of state-owned entities. Corporate entities were active but refrained from taking aggressive bets. 

Papers issued by the Andhra Pradesh Mineral Development Corp., Cholamandalam Investment And Fin. Co., Power Finance Corp., Sammaan Capital, Telangana State Industrial Infrastructure Corp., National Bank For Agriculture And Rural Development, Navi Finserv, Adani Enterprises, Kerala Infrastructure Investment Fund Board  and IIFL Finance were traded the most on bourses Friday.

On Monday, Muthoot Fincorp will raise INR 500 million through the issuance of perpetual bonds. Merchant bankers expect a surge in bond issuances across various sectors, including banks, manufacturing companies, and non-banking financial companies, after Diwali. "We see some state-owned banks and other companies that were waiting for a response to SBI's issue...now that there's a good response from pension funds, issuances are more likely to rise," said the dealer quoted earlier. Several banks are reportedly lined up and expected to tap the market soon.

UDAY BONDS

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In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 5.40 million were traded at a weighted average yield of 6.4994-7.0517%, according to data on the RBI's Negotiated Dealing System-Order Matching System Friday.

* INR 1.70 million of Tamil Nadu's 8.70%, 2029 bond was dealt at a weighted average yield of 7.0517%

* INR 1.70 million of Himachal Pradesh's 8.17%, 2028 bond was dealt at a weighted average yield of 6.9477%

* INR 1.00 million of Rajasthan's 8.21%, 2026 bond was dealt at a weighted average yield of 6.4994%

* INR 1.00 million of Uttar Pradesh's 8.70%, 2031 bond was dealt at a weighted average yield of 6.9565%

BENCHMARK LEVELS FOR CORPORATE BONDS:

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Edited by Avishek Dutta

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