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Informist, Wednesday, Dec. 31, 2025

By Vaishali Tyagi

MUMBAI – Corporate bond yields were steady across tenures on the last trading day of the year, with lack of domestic triggers and subdued participation ahead of the new year, dealers said. Yields across tenures ended steady following the past few days' trend. The 10-year AAA PSU benchmark closed at 7.24%, same as the previous day's close.

"There was participation, but traders were not taking large bets, most of the trades were requirement-based as there are no cues in the market right now," a dealer at a brokerage firm said. "Also, a few traders were not there on account of the holidays... also, there is redemption on mutual funds which are major investors, and they were also on sidelines which kept yields unchanged."

Deals aggregating to INR 112.82 billion were recorded on the National Stock Exchange and BSE combined, as against INR 143.27 billion on Tuesday. In the secondary market, mutual funds were active on the selling side amid low participants, while a very few banks were active on the buying side, dealing in papers maturing in shorter tenures, dealers said. A handful of insurance companies and pension funds were trading papers according to their requirement, they added.

Further, dealers said that overall activity in the primary and secondary markets was subdued as investor sentiment was down due to liquidity crunch in the banking system. Other major players, including insurance companies and pension funds, were largely inactive, resulting in muted activity. 

Papers issued by Sammaan Capital, Navi Finserv, Keertana Finserv, Midland Microfi, Andhra Pradesh State Beverages Corp., IIFL Samasta Finance, Arman Financial Services, Muthoottu Mini Financier, LIC Housing Finance, National Bank For Agriculture And Rural Development were traded the most on the bourses. 

In the primary market, companies issued bonds worth INR 14.05 billion Wednesday, lower from INR 19.00 billion Tuesday. Issuances totalling INR 1.10 billion are scheduled for Thursday. Kosamattam Finance has invited bids to raise INR 1 billion through bonds maturing in May 2028. Akara Capital Advisors will also tap the market to raise funds through bonds. 

Dealers said 2025 was a good year for corporate bonds and issuances are likely to pick up in January. "Issuances are expected to pick up in January due to two factors," a mutual fund manager said. "First is liquidity surplus is likely to return as RBI promised to maintain adequate liquidity in the system and may conduct another OMO soon (two already done), and other reason is that this quarter is the last chance for companies to meet their 2025-26 fundraising targets." The RBI's net liquidity injected into the banking system--a proxy for the liquidity deficit--was INR 715.84 billion Monday, higher than INR 623.02 billion Sunday.

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 150 million were traded Wednesday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 100.00 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at a weighted average yield of 6.7615%

* INR 50.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at a weighted average yield of 6.7538%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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