More Stories

Informist, Wednesday, Dec. 10, 2025

By Vaishali Tyagi

NEW DELHI – Yields on three- and five-year corporate bonds rose 2-3 basis points in the secondary market Wednesday tracking rise in government bond yields as traders sold bonds due to negative market sentiment, dealers said.

Gilt yields rose as traders sold bonds due to a strong belief that the rate cut cycle in India has ended, dealers said. This view follows the 25 basis points cut in repo rate by the Reserve Bank of India's Monetary Policy Committee on Friday to 5.25%, which has taken the total quantum of rate cuts in 2025 to 125 bps.

Yield on the 10-year benchmark gilt ended at its highest level since Mar. 25, breaking out of the trading range through the current financial year despite 100 bps of rate cuts by the MPC. The 10-year benchmark 6.48%, 2035 gilt closed at 6.63% yield, against 6.59% yield Tuesday. The erstwhile 10-year benchmark 6.33%, 2035 gilt ended at 6.66% yield, up from 6.62% yield in the previous session.

Dealers said the sell-off in the corporate bond market was because of multiple factors. "Market sentiment turned negative due to multiple reasons, including stop-loss triggered selling by FIIs (foreign institutional investors) and selling by private banks in the g-sec (government securities) market," a dealer said. "This sell-off effect was also seen in corporate bonds which pushed yields higher."

Dealers said yields on corporate bonds rose also due to the selling pressure from mutual funds who are facing redemption pressures, further weighing on market sentiment. "The stance wasn't changed, but a lot of negative factors came into play at once, leading to the sell-off," the dealer added.

In the secondary market, deals aggregating INR 51.64 billion were recorded on the National Stock Exchange and BSE combined on Wednesday as at 1500 IST, marginally lower than INR 53.42 billion on Tuesday. Mutual funds and banks were actively selling papers across tenures, with selling being pronounced in shorter-tenure papers. Companies were actively buying and selling based on their requirement in the secondary market. A few insurance companies, along with a handful of pension funds, were also actively selling bonds.

Papers issued by the National Bank for Agriculture and Rural Development, Navi Finserv, Bajaj Housing Finance, Keertana Finserv, LIC Housing Finance, UGRO Capital, AYE Finance, Navi Finserv, Krazybee Services, Muthootu Mini Financiers, LIC Housing Finance, Hinduja Leyland Finance, and Bajaj Finance were traded the most on the bourses Wednesday.

In the primary market, companies issued bonds worth over INR 55.20 billion on Wednesday, significantly lower than INR 132.25 billion raised Tuesday. Bank of India raised INR 25 billion at a coupon of 7.28% through 10-year Basel-III compliant additional tier-II bonds. Housing and Urban Development Corp. raised INR 19.05 billion at a coupon of 6.98% through seven-year bonds maturing on Dec. 12, 2032. Dealers said coupons for both the issuances were better than expected.

On Thursday, issuances aggregating to INR 43.85 billion are scheduled. Power Grid Corp is in line to raise funds. The state-owned company has invited bids to raise INR 38 billion through bonds maturing in 10 years. Motilal Oswal Financial Services plans to raise INR 3 billion through three-year bonds. The other issuers are Midland Microfin, Keertana Finserv, and Muthoot Fincorp. 

Traders are waiting for the US Federal Open Market Committee's rate decision at 0030 IST Thursday, which is expected to set the tone for the Indian government bond market and, in turn, the corporate bond market.

UDAY BONDS

None of the Ujwal DISCOM Assurance Yojana bonds were traded in the secondary market for the third straight day Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

BENCHMARK LEVELS FOR CORPORATE BONDS

End

With inputs from Aaryan Khanna

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.