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Informist, Monday, Nov. 24, 2025

By J. Navya Sruthi and Vaishali Tyagi 

MUMBAI – Yields on five-year corporate bonds ended lower by 2 basis points in the secondary market Monday, tracking similar movement in government bond yields, after the Reserve Bank of India governor, in a television interview with Zee Business, hinted at an interest rate cut in the upcoming December meeting. Dealers and fund managers expect three-year and 10-year bond yields to follow the same movement Tuesday.

Bond yields were steady throughout the day, but at the end of the day, yields on five-year bonds fell slightly tracking gilts after the RBI governor's dovish comments, dealers and fund managers said. In the October policy, the Monetary Policy Committee had clearly stated that there is potential to cut rates further, RBI Governor Sanjay Malhotra said in the television interview.

Following the governor's comments, the yield on the benchmark 10-year 6.48%, 2035 bond fell below the psychologically crucial 6.50% level after hovering at this level for most of the day. The yield on the bond ended at 6.48%, down from 6.52% Friday.

Dealers said market participants stayed cautious, abstaining from aggressive moves ahead of borrowing by marquee issuers on Tuesday. Mutual funds were focussed on need-based deals, while banks limited their activity to make space for primary market participation. "I think, liquidity has played a key role that yields did not rise today. As there was good liquidity in the system, traders did not feel to sell papers that aggressively," a dealer at a brokerage firm said. As per latest data, the RBI net absorbed INR 1.51 trillion Sunday, similar to Friday and Saturday. The net absorption figure is a proxy for the systemic liquidity surplus.

In the primary market, issuances aggregating to INR 251.10 billion are scheduled Tuesday. Power Finance Corp. Ltd. plans to raise up to INR 60 billion, National Bank for Agriculture and Rural Development will raise up to INR 70 billion, and Axis Bank will raise up to INR 50 billion. The Small Industries Development Bank of India will raise up to INR 60 billion. Keertana Finserv Ltd., Sundaram Finance Ltd., and Mangal Credit and Fincorp Ltd. have also invited bids to raise funds Tuesday. On Monday, companies issued bonds worth INR 28.70 billion, lower than INR 14.98 billion Friday.

Axis Bank is planning to raise up to INR 50 billion through 10-year infrastructure bonds maturing on Nov. 26, 2035. The issue has a base size of INR 20 billion and a greenshoe option of INR 30 billion. Dealers expect the coupon rate to be 6.80-6.85%, slightly above the 10-year benchmark yields.

"Market was stagnant, now they have to issue (bonds in the primary market) at some point, so they started issuing," Killol Pandya, head of fixed income at JM Financial Mutual Fund, said. He added that one month ago, issuances were not high as hopes of an interest rate cut were not high. On Tuesday, yields are likely to fall slightly following the movement of government bonds, he added.

In the secondary market, deals aggregating to INR 54.35 billion were recorded Monday on the National Stock Exchange and BSE combined, sharply lower than INR 134.47 billion Friday. Mutual funds were selling as well as buying, dealers said. Banks were only selling in the market.

Papers issued by Vivriti Capital, Earlysalary Services, REC, Muthoot Microfin, Indian Railway Finance Corp., Krazybee Services, Shri Ram Finance Corp., Akara Capital Advisors, Anand Rathi Global Finance, Indel Money, Keertana Finserv, The Andhra Pradesh Mineral Development Corp., LIC Housing Finance, Muthoottu Mini Financiers, Sammaan Capital, Telangana State Industrial Infrastructure Corp., NABARD, Muthoot Capital Services, Shriram Finance, and Navi Finserv were traded the most on the exchanges Monday.

UDAY BONDS

In the secondary market, three Ujwal DISCOM Assurance Yojana bonds aggregating to INR 81.00 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching system Monday.

* INR 50.00 million of Tamil Nadu's 7.72%, 2028 bond was dealt at 6.5000%

* INR 20.00 million of Rajasthan's 8.21%, 2026 bond was dealt at 5.8499%

* INR 11.00 million of Haryana's 8.18%, 2026 bond was dealt at 7.4924%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Ashish Shirke

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