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Informist, Monday, Dec. 29, 2025

By Vaishali Tyagi

MUMBAI – Corporate bond yields ended steady Monday as market participants shifted their focus to issuances in the primary market, dealers said. "Activity in the secondary market was more or less subdued today (Monday), as most traders focused on primary market issuances... as everyone was waiting for fresh issuances," a dealer at a brokerage firm said. "The primary market is gaining traction, even today (Monday), several non-banking finance companies were in the queue to raise funds." 

Issuances totalling INR 100.25 billion were scheduled for Monday, including INR 70 billion by the National Bank for Agriculture and Rural Development. However, the NABARD bond maturing on Feb. 23, 2029, was scrapped as investors demanded a higher coupon. NABARD had on Nov. 25 scrapped the same bond issuance due to similar reasons.

NABARD expected the coupon to be around 6.70%, a company official told Informist. According to the bid books accessed by Informist, the company received 84 bids, totalling INR 124.60 billion, with coupon rates ranging from 6.84% to 7.12%.

Other key issuers that tapped the market to raise funds included CEAT, which raised INR 1.75 billion through bonds maturing on Dec. 12, 2030, at a coupon of 7.20%. Annapurna Finance raised INR 1.50 billion through bonds maturing on Apr. 12, 2032, at 11.75%.

On Tuesday, bond issuances totalling INR 17.75 billion are scheduled to raise funds in the corporate debt market. Northern Arc Capital is looking to raise up to INR 2.75 billion through bonds maturing on Dec. 31, 2028, while Kotak Mahindra Investments has invited bids to raise up to INR 5 billion through two different bonds. Other key issuers include L&T Finance, EarlySalary Services, and Edel Finance. 

Dealers also said mutual funds are still facing redemption pressure and are not aggressively trading in the secondary market, limiting yield movement. "Redemption pressure on mutual funds and long-term investors. Therefore, they are doing less aggressive trades, keeping yields stable, especially now around the December quarter-end. With no major trades, yields have remained stable." Dealers said low liquidity in the banking system is also leaving no room for traders to trade papers. The RBI's net injection into the banking system – a proxy for the liquidity deficit – was INR 623 billion on Sunday, similar to that on Saturday and Friday.

Market participants expect corporate bond activity to pick up soon, driven by likely improvements in liquidity and a decline in government bond yields, which could push corporate yields lower. Deals aggregating to INR 71.88 billion were recorded on the National Stock Exchange and BSE combined Monday, compared to INR 70.01 billion Friday. A few mutual funds and banks were active on both the buying and selling sides across tenures, while a handful of pension funds were active on the buying side but in low volumes. Most insurance companies remained absent from the corporate debt market. 

Papers issued by Aditya Birla Capital, Andhra Pradesh State Beverages Corp., HDFC Bank, Kerala Infrastructure Investment Fund Board, Housing & Urban Development Corp., Muthoot Fincorp, Housing & Urban Development Corp., Vedika Credit Capital, Earlysalary Services, and Krazybee Services were traded the most on the bourses. 

UDAY BONDS

In the secondary market, no Ujwal DISCOM Assurance Yojana bonds were traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Saji George Titus

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