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Informist, Monday, Jan. 5, 2026

 

By Vaishali Tyagi

 

MUMBAI – Yields on corporate bonds rose by 2-3 basis points in the secondary market Monday tracking the rise in government bond yields, market participants said. Both mutual funds and insurance companies sold bonds in three-year and five-year tenors, which also added to the rally. However, yields on 10-year bonds were largely steady as there were very few trades in 10-year and above tenure, they said. 

 

Government bond yields edged higher due to larger-than-expected state borrowing calendar for Jan-Mar, dealers said. States after market hours Friday announced an indicative borrowing calendar of INR 5 trillion for Jan-Mar. The quantum was higher than the market's estimate of INR 4.5 trillion. Some sections of the market had expected an even lower number and sold gilts after the notice as they expected investor demand would be concentrated in state government securities, dealers said. The 10-year benchmark 6.48%, 2035 gilt yield ended at 6.63%, up from 6.61% Friday.

 

"The market is seen selling in sovereign (bonds) side after seeing larger-than-expected state borrowing calender, so, accordingly, corporate bond yields have also moved higher compared to previous trading day levels," a dealer at a mid-sized mutual fund house said. "Traders are shifting from longer tenure bonds to shorter duration bonds due to absence of domestic and global triggers, but selling was seen across tenures today (Monday)."

 

In the secondary market, mutual funds and insurance companies were seen selling while some banks and companies were active on both the buying and selling sides, dealers said. Most pension funds remained absent from the market, dealers said. Volume in the secondary market rose to INR 101.11 billion Monday, significantly higher from Friday' total of INR 84.23 billion on the National Stock Exchange and BSE combined. 

 

Dealers expect trading volume in the secondary market to pick up steadily now that participants are back from holidays. Mutual funds have received inflows and are likely to invest in the secondary market due to lack of primary market supply for now. "Mutual funds which have received flows will deploy this capital and portfolio churning will happen now which is likely to push volume even higher," the dealer quoted above said. 

 

Bonds issued by Nuvama Wealth Finance, Navi Finserv, Ambium Finserve, LIC Housing Finance, IIFL Samasta Finance, Navi Finserv, IIFL Samasta Finance, Indel Money, SMC Global Securities, Kotak Mahindra Investments, Krazybee Services, State Bank of India, The Andhra Pradesh Mineral Development Corp., Power Finance Corp., and Kerala Infrastructure Investment Fund Board were traded the most on exchanges.

 

Lacklustre activity continued in the primary market Monday. Issuances totalling INR 3.05 billion were scheduled for Monday, significantly down from INR 14.65 billion on Friday. On Tuesday, activity is expected to remain tepid with single bond issuance of INR INR 400 million by Satin Finserv. Traders are gearing up for a bond issuance spree in Jan-Mar to meet their annual fundraising targets, making January a potentially busy month for corporate bonds, dealers said.

 

UDAY BONDS

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

 

BENCHMARK LEVELS FOR CORPORATE BONDS

 

Tenure	Monday	Friday
Three-year	6.93-6.98%	6.90-6.94%
Five-year	7.04-7.07%	7.02-7.05%
10-year	7.23-7.26%	7.23-7.25%

 

End

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

 

Edited by Tanima Banerjee

 

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