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Informist, Tuesday, Nov. 11, 2025

By Vaishali Tyagi and J. Navya Sruthi

MUMBAI – Yields on corporate bonds ended steady in the secondary market Tuesday as selling by mutual funds offset purchases by banks and other mutual funds, dealers said. A few mutual funds utilised their cash to make purchases, while others sold bonds to meet their daily requirement, which kept yields unchanged from previous close, they said.

Dealers said mutual funds who were facing cash shortages sold bonds, while those with liquidity reserves stepped in to buy. High volumes also made the day hectic in the secondary market. "Market was most active in shorter tenure papers as everybody was demanding in that segment, especially mutual funds who had cash were looking to deploy funds...banks were also demanding bonds in shorter tenure. Some MFs were short on cash even to meet their daily lending requirement and they sold aggressively in first half of trading hours," a dealer at a brokerage firm said.

Dealers said the corporate bond market is subdued due to tighter rates and lack of volatility, with no major triggers in sight. The upcoming meeting of the Monetary Policy Committee of the Reserve Bank of India is nearly three weeks away, so the market is currently driven by demand and supply. Investor flows are low and the primary market is not much active, which usually sets the tone for the secondary market. With rates tight, issuers are not going for fundraising, they added.

In the secondary market, deals aggregating to INR 160.50 billion were recorded on the National Stock Exchange and BSE combined, higher than INR 105.86 billion on Monday. Mutual funds, along with a handful of insurance and pension funds, were active on both buying and selling side, across tenures. Banks were active on the buying side. Most participants were seen trading in the market, dealers said. 

The most-traded papers were those issued by Vivriti Capital, REC, HDFC Bank, Indian Railway Finance Corp., Apex Homes, mPokket Financial Services, the Andhra Pradesh Mineral Development Corp., Muthoottu Mini Financiers, LIC Housing Finance, Sammaan Capital, Telangana State Industrial Infrastructure Corp., and the National Bank for Agriculture and Rural Development.

In the primary market, companies issued bonds worth INR 57.90 billion Tuesday, significantly higher than INR 14.25 billion Monday. On Wednesday, issuances aggregating to INR 68.20 billion are scheduled. NABARD plans to raise up to INR 55 billion through two bond issuances. Bajaj Housing Finance plans to raise up to INR 10 billion through reissuance of October 2028 bonds. Lodha Developers plans to raise INR 2.50 billion through November 2028 bonds. Muthoottu Mini Financiers and AKME Fintrade are also scheduled to borrow funds from the corporate debt market.

In the primary market, dealers said banks are holding back and big public sector undertakings are not tapping the corporate bond market. With systemic liquidity improving, issuers do not seem to need funds right now, except for those who are in urgent need of capital. The central bank's net absorption from the banking system – a proxy for liquidity surplus – was INR 2.01 trillion Monday, down from INR 2.43 trillion Sunday.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds of Tamil Nadu to the tune of INR 1.00 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching System Tuesday.

* INR 1.00 million of Tamil Nadu's 7.73%, 2029 bond was dealt at 7.0956%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Ashish Shirke

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