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Informist, Monday, Dec. 1, 2025

By J. Navya Sruthi 

MUMBAI – Yields on corporate bonds in the secondary market rose 2–4 basis points across tenors Monday on the back of stronger-than-expected GDP data for the September quarter. Yields on corporate bonds were also higher, tracking the rise in gilt yields, which were supported by a weak rupee, dealers said.

However, yields on 10-year paper were largely steady from Friday, dealers said. Dealers expect yields on three- and five-year paper to rise further by 5 bps before the Reserve Bank of India's Monetary Policy Committee meeting scheduled for later in the week.

"G-sec (government securities) moved on Friday, while we did not see much change in yields on corporate bonds. It (the impact of any data) is usually T+1 or T+2 (one or two days later) on corporate bonds," a dealer at a major state-owned bank said. "There were no major deals end of Friday, so yields moved today (Monday, because of GDP)."

India's economy grew more than expected once again, with GDP growth hitting a six-quarter high of 8.2% in Jul-Sept, data released by the statistics ministry Friday showed. The economy had grown higher than expected in the June quarter as well, at 7.8%. GDP growth was 5.6% in the September quarter a year ago.

A dealer at another state-owned bank said higher yields on gilts also implied a rise in yields on corporate bonds. The most traded 6.33%, 2035 bond yield rose above the psychologically crucial level of 6.57%. Similarly, yields on the five-year benchmark 6.01%, 2030 gilt topped 6.28%, the highest since Sept. 12.

Yields on government bonds rose as the rupee fell to a record low of 89.7825 a dollar before recovering somewhat to end the day at a record closing low of 89.5475 a dollar against Friday's close of 89.4575 a dollar. The rupee ended at a record closing low as banks constantly bought dollars on behalf of importers and foreign portfolio investors, currency market dealers said.

"After today's (Monday's) rupee fall, corp bond yields may not rise by more than 5 bps and (may) move in a very narrow range because of policy on Friday," the dealer at the major bank said. "Today, we could see more volume and movement in 5-year papers. Yields on 10-year NABARD paper were almost the same." 

The weighted average yield on Bajaj Finance Ltd.'s five-year bonds, maturing Apr. 3, 2030, rose to 7.31% from 7.28% Friday, according to data on the National Stock Exchange's corporate debt market platform. The most active participants in the five-year tenors were mutual funds and public-sector banks, and they were on the buying side, dealers said. 

Overall, deals aggregating to INR 87.10 billion were recorded Monday on the NSE and BSE combined, up marginally from INR 77.55 billion Friday. Paper issued by Earlysalary Services Pvt. Ltd., REC Ltd., Sammaan Capital Ltd., Hinduja Leyland Finance Ltd., Power Finance Corp. Ltd., Indian Railway Finance Corp. Ltd., LIC Housing Finance Ltd., Muthoottu Mini Financiers Ltd., The Andhra Pradesh Mineral Development Corp. Ltd., Bajaj Finance, UGRO Capital Ltd., and National Bank for Agriculture and Rural Development were traded the most on the exchanges Monday.

Meanwhile, in the primary market, issuances aggregating to INR 19.18 billion were scheduled for Monday, down sharply from INR 121.10 billion Friday. Tuesday, Tata Projects Ltd. and 360 ONE Prime Ltd. have invited bids to raise funds. Issuances aggregating to INR 6.25 billion are scheduled for Tuesday.

UDAY BONDS

In the secondary market, three Ujwal DISCOM Assurance Yojana bonds aggregating to INR 24.80 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching system Monday.

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at 6.4846%

* INR 7.50 million of Chhattisgarh's 8.70%, 2031 bond was dealt at 7.0524%

* INR 6.00 million of Uttar Pradesh's 8.35%, 2029 bond was dealt at a weighted average yield of 6.5988%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

With inputs from Aaryan Khanna

Edited by Rajeev Pai

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