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Informist, Tuesday, Nov. 4, 2025

 

By Vaishali Tyagi

 

MUMBAI – Yields on corporate bonds in the secondary market remained in a narrow band Tuesday as participants shifted their focus to the primary market, especially on bonds issued by several non-banking financial companies and infrastructure project companies, dealers said. Trading activity in the secondary market remained limited to portfolio churning, and a few traders sold a few long-term bonds from their kitty ahead of the market holiday on Wednesday, which kept yields steady, they said. India's financial markets will be closed on Wednesday for Guru Nanak Jayanti. 

 

Earlier in the day, buying demand from mutual funds and banks led to a decline in yields in short-term bonds maturing up to three years. However, selling pressure from a few mutual funds and insurance companies pushed levels back to previous levels, dealers said. "Corporate (bonds) are not so reactive (these days)...and yields in short-end moved slightly lower due to the return of liquidity...as some banks and mutual funds bought papers," a dealer at a brokerage firm said. 

 

Dealers said the secondary market was largely positive Tuesday, driven by corporate activity and banks and mutual funds actively buying and selling to meet their requirements. Trading volumes in the secondary market were slightly higher on Tuesday as a few good deals were executed, including a good amount of buying and selling by insurance companies.

 

In the secondary market, deals aggregating to INR 137.21 billion were recorded on the National Stock Exchange and BSE combined on Tuesday, significantly lower than INR 130.71 billion on Monday. Mutual funds and banks were actively buying and selling papers across various tenures, with a more pronounced buying demand in shorter-tenure papers. Companies were active in the secondary market to buy bonds. A few insurance companies, along with a handful of pension funds, were active in buying and selling bonds. 

 

Papers issued by Kerala Infrastructure Investment Fund Board, Muthoot Finance, The Andhra Pradesh Mineral Development Corp. Ltd., Muthootu Mini Financiers Ltd., LIC Housing Finance Ltd., Hinduja Leyland Finance Ltd., National Bank for Agriculture and Rural Development, and Bajaj Finance Ltd. were traded the most on bourses on Tuesday. 

 

In the primary market, companies issued bonds worth over INR 26 billion on Tuesday, higher than INR 14.90 billion raised Monday. On Wednesday, issuances aggregating to INR 29.85 billion are scheduled. Muthoot Finance has invited bids to raise INR 15 billion through the reissuance of two bonds of different maturities. Grand Hills Developments plans to raise INR 3.6 billion through two bonds. Amongst other big companies, Avigna Housing, Keertana Finserv, and Aegis Vopak Terminals are also scheduled to tap the corporate debt market on Wednesday.

 

Dealers expect the primary corporate bond market to remain active. Market participants said that recent bond issuances are largely driven by specific requirements these days. However, dealers see a pickup in primary market activity in October. "Some big issuances are expected this week or next week, as NTPC Green Energy is in line to tap (the market), and we may see some more big names to follow suit, especially PSUs (public sector undertakings)," the dealer quoted above said.

 

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 1.97 billion were traded across three bonds, according to data on the RBI's Negotiated Dealing System-Order Matching System Tuesday.

 

* INR 1.13 billion of Tamil Nadu's 7.68%, 2026 bond was dealt at 5.8999%

* INR 813.0 million of Rajasthan's 8.19%, 2026 bond was dealt at a weighted average yield of 6.4434%

* INR 30.00 million of Jammu and Kashmir's 8.48%, 2029 bond was dealt at 6.9962%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

 

Tenure	TUESDAY	MONDAY
Three-year	6.72-6.74%	6.72-6.75%
Five-year	6.83-6.85%	6.84-6.87%
10-year	7.12-7.14%	7.13-7.15%

 

End

 

With inputs from Aaryan Khanna

Edited by Tanima Banerjee

 

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