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Informist, Monday, Nov. 17, 2025

By Vaishali Tyagi

MUMBAI – Yields on the corporate bonds in the secondary market ended higher as traders sold bonds, paring bets of a rate cut by the Reserve Bank of India's Monetary Policy Committee as India's trade deficit widened to a record high in October, dealers said. "Earlier, food number of traders bought papers expecting a rate cut in upcoming policy meet, wanting to lock in higher yields, but now that the hopes of rate cuts are down...they (traders) are selling" a dealer said. 

India's merchandise trade deficit in October widened to an all-time high on record high imports during the month, according to data from the commerce ministry Monday. Merchandise exports fell the sharpest in 15 months in October on a year-on-year basis. In October, merchandise exports fell 11.8% on year to $34.38 billion while imports rose 16.6% to $76.06 billion.

Other few traders remained cautious, awaiting the RBI's December policy outcome and will take positions based on the policy outcome, dealers said. Monday, trading started with heavy selling, tracking rise in government bond yields, but later trading activity remained mixed, with mutual funds rebalancing portfolios and other participants carrying out need-based trades. Later in the day, selling across various tenures offset buying demand from insurance companies and pension funds, with all transactions being in short-term tenures. "I would say there is lack of clarity around rate cut trajectory which also led to some selling earlier but later in the day things were balanced but yields remained on higher side," dealers said. 

Moreover, traders are watching the India-US trade deal and September quarter GDP print for cues on domestic interest rates. A trade deal may reduce bets on an RBI rate cut in December. Some traders have already given up those bets as they expect GDP growth to beat RBI estimates in Jul-Sept. The RBI projects India's GDP growth in the September quarter at 7.0%. Traders expect a reading between 7.0% and 7.5% and India Ratings' estimate is 7.2%, both of which are unlikely to lead to rate cuts, dealers said. "The market is also watching the US-India tariff situation, and market expects a clear announcement from the RBI in December, which could drive some movement in bond (corporate) market," the dealer quoted above said.

In the secondary market, deals aggregating to INR 109.47 billion were recorded on the National Stock Exchange and BSE combined Monday, significantly higher from INR 74.84 billion Friday.  Paper issued by Vivriti Capital Ltd., Earlysalary Services Pvt. Ltd., REC Ltd., Muthoot Microfin Ltd., Indian Railway Finance Corp. Ltd., Krazybee Services Pvt. Ltd., Shri Ram Finance Corp. Pvt. Ltd., Akara Capital Advisors Pvt. Ltd., Indel money Ltd., Lucina Land Development Ltd., Andhra Pradesh State Beverages Corp. Ltd., Keertana Finserv Ltd., and The Andhra Pradesh Mineral Development Corp. Ltd. were traded the most on the exchanges Monday.

In the primary market, companies issued bonds worth INR 20.25 billion Monday, sharply up from INR 5.05 billion Friday. Tuesday, issuances aggregating to INR 10.75 billion are scheduled. Maithon Power Ltd., which was scheduled to raise INR 5.50 billion Monday has been now changed to Tuesday. Kotak Mahindra Prime also plans to raise INR 5 billion Tuesday through reissuance of two bonds. Other than these two big issuances, Edel Finance Co. Ltd. and Midland Microfin Ltd. have also invited bids to raise funds Tuesday.

In primary market, corporate bond market is awaiting a clear signal from the RBI on interest rates and the activity will pick up only after that. "Some issuers who are in urgent need of capital will raise money irrespective of rate cut or not but of course some issuers do no want to give higher coupon and they will wait for clarity on rate trajectory," a dealer at another brokerage firm said.

UDAY BONDS

In the secondary market, Ujwal DISCOM Assurance Yojana bonds of Tamil Nadu to the tune of INR 9.00 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching System Monday.

* INR 9.00 million of Tamil Nadu's 7.73%, 2029 bond was dealt at 7.1583%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Akul Nishant Akhoury

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