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Informist, Tuesday, Dec. 2, 2025

By J. Navya Sruthi

MUMBAI – Yields on corporate bonds in the secondary market were largely steady across tenors Tuesday from the previous day on lack of fresh cues, dealers said. However, during the day, yields on three-year paper fell slightly, tracking gilts, they said. Dealers expect yields on three and five-year bonds to fall slightly Wednesday. 

"Yields on NABARD (National Bank For Agriculture And Rural Development) 2028 paper opened at 6.75% and during the day it fell to 6.73% tracking gilts. But later yields (on NABARD) stabilised at 6.75%," a dealer at a brokerage firm said. "I got one offer at 6.73-6.74% for NABARD three-year during the day, but there was no demand, so yields rose to 6.75%," the dealer said. 

The dealer expects yields on three- and five-year corporate bonds to open lower by 2-3 bps on Wednesday, taking cues from gilts. Market participants also await the Reserve Bank of India's Monetary Policy Committee meeting, scheduled later this week. 

The most traded 6.33%, 2035 gilt ended at INR 98.70, or 6.52% yield, against INR 98.31, or 6.57% yield, in the previous session. The 6.33%, 2035 gilt yield fell 7 basis points intraday, from the day's high of 6.59%. Gilts dealers speculated that the Reserve Bank of India bought gilts during the day, which led to a surge in prices and a fall in yields.  

The market is divided on a rate cut in the upcoming meeting. While a few market participants and experts expect a rate cut as they see the December meeting as the final chance to cut interest rates, others do not see one, on the back of firm GDP data for the September quarter. The section of the market that does not see a cut on Friday expects dovish comments and a change in stance from neutral to accommodative. 

In the secondary market, mutual funds were major players and were on the buying side. A dealer at a domestic mutual fund said, "SBI MF (mutual fund) sold 325 crore (INR 3.25 billion) worth bonds today (Tuesday)... might be because of monthly redemption pressure." While volume of the NABARD March 2027 bond was higher mainly because of SBI mutual fund, the NABARD September 2028 bonds was well bid by public sector undertakings, the dealer said. 

Tuesday, the volume of NABARD's Mar. 15, 2027 bond was INR 1 billion and that of Sept. 15, 2028 bond was INR 2.75 billion, according to data available on the NSE and BSE.

Overall, deals aggregating to INR 112.34 billion were recorded Tuesday on the NSE and BSE combined, significantly up from INR 87.10 billion Monday. Papers issued by Vivriti Capital, Earlysalary Services Pvt. Ltd., REC Ltd., Krazybee Services, Akara Capital Advisors, Keertana Finserv, The Andhra Pradesh Mineral Development Corp. Ltd., NABARD, Muthoot Capital Services, Muthoot FinCorp., and UGRO Capital were traded the most on the exchanges Tuesday.

Meanwhile, in the primary market, issuances aggregating to INR 6.25 billion were scheduled for Tuesday, down sharply from INR 19.18 billion Monday. Wednesday, Nuvawa Wealth and Investment, Muthoot Fincorp, and Hero Fincorp have invited bids to raise funds. Issuances aggregating to INR 12.0 billion are scheduled for Wednesday.

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bonds aggregating to INR 11.30 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching system Tuesday.

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at a weighted average yield of 6.4801%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Deepshikha Bhardwaj

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