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Informist, Wednesday, Oct. 29, 2025

By Janwee Prajapati

MUMBAI – Yields on corporate bonds in the secondary market remained steady Wednesday due to requirement-based trading as participants shifted their focus to primary market issuances, dealers said. "Yields are not moving much these days and staying in very narrow band as no buyers are placing aggressive bets which can move yields (secondary market)...also, traders are awaiting for cues to put aggressive bets to get returns," a dealer at a brokerage firm said. "People are eyeing primary market issuances which can provide cues on secondary (corp bond) market yields levels."

Dealers said primary market issuances are still on the lower side as issuers await a potential rate cut in the upcoming Reserve Bank of India's monetary policy committee meeting in December, hoping to lower borrowing costs. Conversely, investors are shifting to the primary market seeking higher yields before rate cuts.

Meanwhile, RBI Deputy Governor Poonam Gupta--who is a Monetary Policy Committee member--said there was still room to ease monetary policy as GDP growth was below potential and aspirations even at 6.8% in 2025-26 (Apr-Mar). However, Gupta reiterated her comments from the minutes of the MPC's last meeting that when and how much of the monetary policy space is used remains to be seen. Her remarks were not seen to make a stronger case for rate cuts and some traders were disappointed with them, dealers said. RBI Governor Sanjay Malhotra said two weeks ago that an early resolution to tariffs could lead to an upside to growth.

In the secondary market Wednesday, deals aggregating to INR 118.38 billion were reported on the National Stock Exchange and BSE combined, higher than INR 91.67 billion Tuesday. Demand for longer-tenure corporate bonds rose as Employees' Provident Fund Organisations were seen buying in the corporate bond market. Mutual funds were seen buying and selling in lower volume but were seen on the back seat due to month-end redemption pressure. Banks and insurance companies were seen selling in small quantums. Dealers said traders across segments were selling to reserve cash for participation in the primary market, as it is expected to gain some momentum.

Paper issued by National Bank For Agriculture And Rural Development, Rural Electrification Corp. Ltd., IIFL Finance Ltd., Nuvama Wealth And Investment Ltd., Muthoot Finance Ltd., Telangana State Industrial Infrastructure Corp. Ltd., State Bank of India, Indian Railway Finance Corp Ltd., and HDB Financial Services Ltd. were traded the most on the exchanges Wednesday.

In the primary market, companies issued bonds worth INR 15.75 billion, lower than INR 21.85 billion scheduled Tuesday. "Issuers are only going for very small amount of issues, they are uncertain to raise funds as they are expecting a policy rate cut in December," another dealer at a brokerage firm said. "Large private sector banks are completely absent from the market, only a few PSUs (public sector undertakings) are seen in the market (borrowing)and that too picked up now but overall the fundraising is still low." 

Thursday, issuances aggregating to INR 36.77 billion are scheduled. Poonawalla Fincorp Ltd. plans to raise INR 20 billion by issuing bonds carrying a separately transferable redeemable principal part structure, or STRPP, where the principal and coupon payments are stripped and sold separately to investors. Aditya Birla Housing Finance Ltd. plans to raise up to INR 2 billion through reissuance of bonds maturing on Apr. 23, 2035. Navi Finserv Ltd. plans to raise up to INR 2.35 billion through three bonds with different maturities. Axis Finance Ltd. plans to raise INR 2 billion through reissuance of Basel-III-compliant tier-II bonds maturing Aug. 8, 2035. Among other companies, 360 One Prime, Krazybee Services, Clean Max Enviro Energy Solutions and Mahindra Rural Housing Finance plan to raise funds through bonds on Thursday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 7.70 million were traded across two bonds in single trades, according to data on the RBI's Negotiated Dealing System-Order Matching System Wednesday.

* INR 4.60 million of Tamil Nadu's 7.74%, 2032 bond was dealt at 6.9414%

* INR 3.10 million of Uttar Pradesh's 8.49%, 2028 bond was dealt at 6.5672%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

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

With inputs from Aaryan Khanna

Edited by Deepshikha Bhardwaj

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