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Informist, Friday, Jan. 2, 2026

 

By Vaishali Tyagi

 

MUMBAI – Yields on corporate bonds ended steady on Friday due to a lack of fresh domestic and global triggers, dealers said. However, secondary-market trade volume rose as participation improved compared with Thursday. Market activity has picked up, with participants trickling back from their New Year holidays, traders said, adding that the activity is likely to get even more hectic from Monday as more people return. 

 

In the secondary market, some banks and companies were active on both the buying and selling sides, while some mutual funds purchased shorter-tenure papers, dealers said. "Mutual funds are becoming active again, so they are buying in the market currently, especially the shorter tenure paper," a dealer at a mid-sized brokerage firm said. "Some mutual funds were seen buying as they received some inflows, therefore they bought papers up to three-year maturity to deploy their funds."

 

Volume in the secondary market nearly doubled on Friday, with deals totalling INR 84.23 billion recorded on the National Stock Exchange and BSE combined, compared with INR 49.33 billion on Thursday. 

 

Bonds issued by Muthoot FinCorp, State Bank of India, The Andhra Pradesh Mineral Development Corp., Aditya Birla Finance, Kerala Infrastructure Investment Fund Board, Lucina Land Development, National Bank for Agriculture and Rural Development, Telangana State Industrial Infrastructure Corp, Piramal Capital & Housing Finance, IIFL Home Finance, and Western Capital Advisors were traded the most on exchanges.

 

Lacklustre activity continued in the primary market on Friday. Issuances totalling INR 14.65 billion were scheduled for Friday, up from INR 1.10 billion on Thursday. On Monday, issuances totalling INR 3.45 billion are scheduled. Fedbank Financial Services has invited bids to raise INR 2 billion through bonds maturing in December 2029. Muthoot Microfin will also tap the bond market to raise INR 750 million. Satin Finserv and Ambium Finserve will issue bonds to raise funds on Monday. 

 

Market participants are gearing up for a surge in primary market bond issuances in Jan-Mar, as companies rush to raise funds to meet their annual targets. "Yields will likely fluctuate based on the number of issuances in the near term," a dealer at a mid-sized brokerage firm said.

 

January is expected to be a busy month for corporate bonds, driven by improved liquidity in the banking system. With systemic liquidity surplus expected to continue improving due to the RBI's liquidity injection measures, volume and issuance of short-term debt papers are likely to rise in the coming days, dealers said. The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 238.65 billion Thursday, higher than INR 173.35 billion Wednesday.

 

The board of NHPC will Thursday mull raising funds up to INR 20 billion through bonds as part of its borrowing plan for 2025-26 (Apr-Mar). Dealers said more state-owned entities are likely to follow suit. 

 

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 150.00 million were traded Friday, 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 6.6211%

* INR 50.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at a weighted average yield of 6.6113%

 

BENCHMARK LEVELS FOR CORPORATE BONDS

 

Tenure	Friday	Thursday
Three-year	6.90-6.94%	6.90-6.93%
Five-year	7.02-7.05%	7.02-7.05%
10-year	7.23-7.25%	7.23-7.25%

 

End

 

Edited by Saji George Titus

 

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