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Informist, Wednesday, Dec. 17, 2025

By Vaishali Tyagi

MUMBAI - Yields on corporate bonds ended 1-2 basis points higher across tenures in the secondary market Wednesday tracking rise in government bonds, dealers said. Yields on corporate bonds also rose as some mutual funds sought to meet their portfolio requirements while others sold to meet redemption pressure, dealers said.

In the government bond market, yields rose tracking overnight indexed swap rates. Traders sold gilts to trim their risk ahead of the INR 500-billion open market operation auction Thursday. Some feared the cut-off prices at the auction, especially on the 6.33%, 2035 gilt, may not be as high as expected. The 10-year benchmark 6.48%, 2035 gilt closed at a yield of 6.5995%, against 6.5745% yield, Tuesday.

"There was not much aggressive activity seen in the market today (Wednesday), earlier in the day...whatever activity took place, it was mostly on selling side as some mutual funds are facing redemption pressure," a dealer at a brokerage firm said. "Later, some banks and MFs sold tracking rise in g-sec (government securities), which pushed yields 1-2 basis points higher."

Banks and mutual funds sold corporate bonds as gilt yields rose, which narrowed the spread between the two and made corporate bonds less attractive. Corporate bond yields and gilt yields usually move in tandem, with corporate bonds trading at specific spreads over government bonds, which remain relatively stable with slight fluctuations based on demand and supply, dealers said.

Deals aggregating to INR 104.49 billion were recorded on the National Stock Exchange and BSE combined Wednesday, lower than INR 122.84 billion Tuesday. Mutual funds and banks were active on the selling side across tenures while a handful of insurance companies and corporates were active on the buying side but were seen dealing in low volumes. Pension funds were active on both sides.

Papers issued by Navi Finserv, The Andhra Pradesh Mineral Development Corp., Incred Financial Services, National Highways Authority of India, IIFL Samasta Finance, Piramal Finance, Krazybee Services, Muthoot Fincorp, Adani Enterprises, and Telangana State Industrial Infrastructure Corp. were traded the most on the bourses Wednesday.

In the primary market, companies issued bonds worth over INR 4.18 billion Wednesday, sharply down from INR 32.65 billion Tuesday. On Thursday, issuances aggregating to INR 43.21 billion are scheduled. Tata Power has invited bids to raise INR 20 billion by issuing two bonds of different maturities. Brookfield India Real Estate Trust will raise up to INR 20 billion by issuing bonds maturing on Dec. 20, 2030. Navi Finserv and Neogrowth Credit will also raise funds Thursday.

Dealers said overall primary issuances are low even though yields are moving by just 1-2 bps. Some non-banking companies are opting for short-term debt, while others are waiting for rates to fall. Merchant bankers expect issuances to pick up if borrowing rates decline or yields stabilise.

UDAY BONDS

In the secondary market, three Ujwal DISCOM Assurance Yojana bonds aggregating to INR 200 million were traded, according to data on the RBI's Negotiated Dealing System-Order Matching system Wednesday.

* INR 100 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at 7.3%

* INR 90 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 7.3%

* INR 5 million of Telangana's 8.04%, 2031 bond was dealt at 7.1508%

* INR 5 million of Andhra Pradesh's 7.35%, 2029 bond was dealt at 7.1518%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

With inputs from Shubham Rana

Edited by Ashish Shirke

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