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Informist, Friday, Dec. 12, 2025

By J. Navya Sruthi

MUMBAI – Yields on corporate bonds ended steady Friday in the secondary market owing to a lack of fresh cues, dealers said. Yields on government bonds also ended steady Friday after remaining volatile throughout the day.

"Yields are flattish as gilts were volatile but in a range, (corporate) bonds didn't react much," a dealer at a broking firm said. The most-traded 6.48%, 2035 gilt ended largely steady from Thursday at INR 99.18 and yield on the security was 6.5931%, against 6.5832%. The erstwhile 10-year benchmark 6.33%, 2035 gilt was flat at INR 98.04 and yield was also steady at 6.6123%.

Dealers said there was more volume in shorter-tenure bonds such as those maturing in 2-5 years. They expect the Reserve Bank of India's open market operations auction Thursday to have infused INR 500 billion durable liquidity into the banking system Friday, which will weigh on yields in the future, dealers said.

"With 100 bps (basis points) of repo rate cuts already delivered (in FY26), we believe the majority of the RBI's rate easing is now behind us. Looking ahead, with limited scope for further aggressive rate cuts, we expect the RBI to maintain its accommodative liquidity stance. This should continue to support the shorter end of the yield curve," Axis Mutual Fund said in its report Friday.

The fund house expects lower inflation, strong GDP growth, RBI's OMO auctions in December, and the possibility of India's inclusion in Bloomberg indices to provide a tactical opportunity for long bond investing. "Incrementally short bonds can outperform long bonds from risk-reward perspective due to a
shallow rate cut cycle, lower OMO purchases in the second half of the year and a shift in focus to Govt Debt to GDP targets," it said.

In the secondary market, deals aggregating to INR 84.83 billion were recorded on the National Stock Exchange and BSE combined Friday, significantly lower than INR 97.14 billion Thursday. Paper issued by the Small Industries Development Bank of India, National Bank for Agriculture and Rural Development, Bajaj Housing Finance, Keertana Finserv, Navi Finserv, UGRO Capital, Muthoottu Mini Financiers, Shriram Finance, The Andhra Pradesh Mineral Development Corp., Indel Money, Kerala Infrastructure Investment Fund Board, and The Andhra Pradesh Mineral Development Corp., were traded the most on the bourses.

In the primary market, companies issued bonds worth over INR 89.10 billion, up from INR 43.85 billion Thursday. Monday, issuances aggregating to INR 56.15 billion are scheduled. Indian Railway Finance Corp., Muthoot Microfin, and IIFL Finance will raise funds through bonds. Indian Railway Finance Corp. will raise up to INR 50 billion through bonds maturing Dec. 17, 2035. A few other non-banking finance companies will also tap the debt market to raise funds.

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds aggregating to INR 14 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching system Friday.

* INR 12 million of Andhra Pradesh's 7.35%, 2030 bond was dealt at 6.8713%

* INR 2 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 6.3747%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

With inputs by Aaryan Khanna

Edited by Deepshikha Bhardwaj

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