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Informist, Wednesday, Dec. 24, 2025

By J. Navya Sruthi

MUMBAI – Yields on three- and five-year corporate bonds fell by two to three basis points in the secondary market Wednesday tracking the fall in government bond yields, market participants said. Yields on gilts fell as the Reserve Bank of India after market hours Tuesday announced open market operation auction. Volumes in secondary market were low due to holiday season. 

"RBI's OMO led to (price) rally in market (corporate bonds and government bonds)," a dealer at a brokerage firm said. Yield on the 10-year benchmark gilt was down over 9 basis points Wednesday, the highest fall in a day since Apr. 2 due to firm demand for the bonds ahead of OMO, which is due on Monday. 

The RBI announnced that it will buy INR 2 trillion of government bonds through open market operation auctions in four tranches across December and January. The central bank offered to buy the 6.79%, 2029; the 7.61%, 2030; the 7.26%, 2033; the 6.79%, 2034; the 6.67%, 2035; the 7.18%, 2037, and the 7.30%, 2053 gilts at the INR-500-billion OMO auction Monday.

"We can see yields falling at least by two to three basis points Friday. But there will be thin attendance on Friday also," a dealer at a public-sector undertaking company said. Dealers said most volumes were seen in short term bonds, while the 10-year benchmark paper, National Agriculture and Rural Development, was not dealt. Dealers said that the 10-year NABARD is not actively traded these days due to lack of cues on macro economy.    

Deals aggregating to INR 119.14 billion were recorded on the National Stock Exchange and BSE combined, against INR 102.59 billion Tuesday. Paper issued by National Bank For Agriculture and Rural Development, Bajaj Housing Finance, Muthoot Finance, Small Industries Development Bank of India, Navi Finserv, UGRO Capital, Earlysalary Services, Andhra Pradesh State Beverages, Vivriti Capital, IIFL Samasta Finance, IIFL Finance, Sundaram Finance, Krazybee Services, and Muthoot Microfin were traded the most on the bourses. 

In the primary market, companies issued bonds worth of INR 15.75 billion Wednesday, against INR 186.72 Tuesday. Issuances totalling INR 3.25 billion are scheduled for Friday. Trust Investment Advisors, Mufic Green Finance, and Fusion Finance will raise funds on Friday. NABARD will raise INR 70 billion through February 2029 bonds Monday. The market expects coupon to be around 6.98%.    

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond of INR 12.80 million was traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 12.80 million of Tamil Nadu's 7.74%, 2032 bond was dealt at a weighted average yield of 7.2760%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Akul Nishant Akhoury

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