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Informist, Friday, Jan. 16, 2026

By Vaishali Tyagi

MUMBAI/NEW DELHI – Yields on corporate bonds rose by two to three basis points in the secondary market Friday, tracking the rise in government bonds yield, dealers said. Low banking system liquidity and mutual funds' redemption pressure led to even more selling, pushing yields higher, they said. The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 1.09 trillion Thursday, up from INR 764.38 billion Wednesday.

"Yields continued to rise today as well (Friday) due to rise in g-sec yields (government securities) and also due to low cash with investors as participants from different segments sold bonds across tenures," a dealer at a brokerage firm said. "Liquidity is not that comfortable these days, therefore you will see selling by many participants from different segments including pension funds, insurance companies, along with mutual funds as they are also facing some redemption pressure."

Government bond yields ended higher as traders made space for fresh auction supply. The rise was also driven by a surge in the five-year overnight indexed swap to an 11-month high. The rupee's 57-paise fall against the dollar, its biggest drop in nearly two months, also pushed yields up. The bond's yield ended at 6.68%, up from 6.65% Wednesday, marking its highest closing level since Mar. 17.

Dealers said there are no major domestic or global triggers in sight, a few traders are just trading based on their requirement as there are no clear direction to bet on. A handful of investors sold papers in secondary market to participate in the primary market to invest in big issuance like Torrent Pharmaceuticals Ltd. Mutual funds sold bonds they purchased earlier when yields were lower, to invest in higher-yielding papers as rates have risen now. "Some traders sold 10-year bonds which had yields at 7.40-50%, while Torrent Pharma's (Pharmaceuticals) five-year bond is giving 7.80%...why would investors not go there because of that we saw a good churning", a dealer at a state-owned bank said. 

Activity in the primary market rose significantly Friday from Wednesday with one key issuance of Torrent Pharma. The company raised INR 110 billion through four bonds of different maturities Friday, Barclays Bank plc, The Hongkong and Shanghai Banking Corp. Ltd., and Standard Chartered Bank were said to be the arrangers for the issuance. Friday, issuances totalling over INR 127 billion were scheduled, up from Wednesday's INR 7.24 billion. Issuances worth INR 3.75 billion are scheduled for Monday. A handful of non-banking finance companies, including Navi Finserv and Keertana Finserv, are in line to raise funds from the corporate debt market. 

In the secondary market, mutual funds, insurance companies and pension funds were seen actively selling bonds across tenures. Banks and companies were also seen selling but in low volumes, dealers said. Friday, volume in the secondary market was at INR 111.72 billion on the National Stock Exchange and BSE combined, lower than 135.53 billion Wednesday. 

Bonds issued by NTPC, Akara Capital Advisors, Capri Global Capital, Vivriti Capital, Piramal Finance, IIFL Finance, Satin Creditcare Network, The Andhra Pradesh Mineral Development Corp., Keertana Finserv, Akara Capital Advisors, Nuvama Wealth Finance, Avanti Finance and IIFL Samasta Finance were traded the most on exchanges Friday.

Merchant bankers expect activity to pick up once banking system liquidity improves further, with mutual funds and investors putting cash to invest. Portfolio churning should also pick up, boosting trading volume.

UDAY BONDS

In the secondary market, two Ujwal DISCOM Assurance Yojana bonds worth INR 440.00 million were traded Friday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 400.00 million of Uttar Pradesh's 8.64%, 2028 bond was dealt at 6.8500%

* INR 40.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 6.7269%

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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