India Corporate Bonds
Ylds flat amid uncertainty over RBI policy rate cut
This story was originally published at 20:56 IST on 7 November 2025
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By Vaishali Tyagi and Janwee Prajapati
MUMBAI – The corporate bond market saw a dull day due to unclear guidance on rate cuts from the Reserve Bank of India. Due to this, yields on corporate bond in the secondary market remained steady since last week and ended flat on Friday as traders were uncertain whether the RBI's Monetary Policy Committee will cut the repo rate at it meeting December, dealers said.
"Traders are looking for data and guidance to make moves... market's completely steady and traders do not expect yields to move in any direction from here unless some very specific data guide the market, therefore, now everyone's waiting for more data to get some clarity on rate cuts in India," a fund manager at a mutual fund house said.
Dealers said investors are holding back, waiting for November data to provide clarity on rate cuts and until then, the market is expected to remain steady, and they (investors) are adopting a cautious approach, avoiding aggressive buying or selling, which is keeping yields stable. In the secondary market, deals aggregating to INR 50.79 billion were recorded on the National Stock Exchange and BSE combined on Friday, significantly lower than INR 38.50 billion on Thursday.
In the secondary market, deals aggregating to INR 78.38 billion were recorded on the National Stock Exchange and BSE combined on Friday, lower than INR 89.27 billion on Thursday. Mutual funds were actively buying and selling papers across various tenures, with a more pronounced demand in shorter-tenure papers. A handful of insurance companies were active in buying and selling bonds as per their requirements. However, the trade volume remained muted ahead of the weekend. Companies and pension funds were largely absent from the secondary corporate bond market.
Most traded papers on Friday were those issued by the National Bank for Agriculture and Rural Development, Kotak Mahindra Investments Ltd., Housing and Urban Development Corp. Ltd., Rural Electrification Corporation Ltd., HDB Financial Services Ltd., National Housing Bank, Small Industries Development Bank of India, Bajaj Finance Ltd., Power Finance Corp. Ltd., LIC Housing Finance Ltd., and Vivriti Capital Ltd.
In the primary market, companies issued bonds worth over INR 51.50 billion on Friday. NTPC Green Energy Ltd. raised INR 15.00 billion at a coupon of 7.01% on bonds maturing on Nov. 12, 2035. The issue was fully subscribed. Dealers said coupon of the NTPC Green's bond issuance was in line with market expectations, as the market expected it to be in the range of 6.99% to 7.03%.
On Monday, issuances aggregating to INR 15.25 billion are scheduled. HDB Financial Services Ltd. plans to raise up to INR 9 billion through the re-issuance of two bonds. R Systems International Ltd. plans to raise INR 2.75 billion by issuing five-year bonds. Muthoot Microfin Ltd. is also scheduled to borrow funds from the corporate debt market.
On the primary issuance front, dealers said issuances were steady in terms of size and quantum, with issuers coming in as needed, but there was no significant cue to drive aggressive issuance.
UDAY BONDS
In the secondary market, Ujwal DISCOM Assurance Yojana bonds aggregating to INR 45.65 million were traded across five bonds, according to data on the RBI's Negotiated Dealing System-Order Matching System Friday.
* INR 9.20 million of Uttar Pradesh's 8.77%, 2031 bond was dealt at 7.03%
* INR 7.00 million of Telangana's 7.81%, 2032 bond was dealt at 7.1108%
* INR 21.65 million of Rajasthan's 8.21%, 2026 bond was dealt at 6.2201%
* INR 2.80 million of Tamil Nadu's 7.75%, 2031 bond was dealt at 7.0336%
* INR 5.00 million of Telangana's 7.81%, 2027 bond was dealt at 6.4791%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | FRIDAY | THURSDAY |
Three-year | 6.71-6.73% | 6.71-6.73% |
Five-year | 6.81-6.84% | 6.82-6.84% |
10-year | 7.11-7.14% | 7.12-7.14% |
End
Edited by Akul Nishant Akhoury
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