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Informist, Thursday, Jan. 22, 2026

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds in the secondary market slumped across tenures on Thursday, driven by aggressive buying from mutual funds after receiving fresh inflows which they wanted to deploy, dealers said. A few other dealers added that they had earlier sold bonds to hold cash, waiting for yields to rise to more lucrative levels before re-entering the market.

"There was strong buying by mutual funds today (Thursday), with other players also present, but mutual funds dominated the activity," a dealer at a brokerage firm said. "They had been waiting for attractive levels and now see current yields as lucrative, expecting them not to rise much further."

Mutual funds were actively trading to lock in higher-yielding papers before yields fell further. "Market participants thought rates would climb further ahead of the policy outcome, but cash-rich traders began buying, pulling yields down and sparking FOMO (fear of missing out)- driven purchases that accelerated the decline," the dealer quoted above said.

In the secondary market, participants from different segments were seen trading actively, while most mutual funds were buying papers across tenures. A few other mutual funds, insurance companies and banks were also seen selling bonds across tenures in low volume. Pension funds remained largely absent from the market, dealers said. On Thursday, volume in the secondary market was at INR 142.28 billion on the National Stock Exchange and BSE combined, higher from INR 130.93 billion Wednesday. 

Bonds issued by Toyota Financial Services, Incred Capital Financial Services, Mahindra & Mahindra Financial Services, Indostar Capital Finance, Spandana Sphoorty Financial, Satin Creditcare Network, Navi Finserv, IIFL Finance, National Bank For Agriculture and Rural Development, and Power Finance Corp. were traded the most on exchanges Thursday.

Activity in the primary market rose significantly Thursday, with volume surging to over INR 105 billion from INR 60 billion Wednesday. Dealers said bond issuances are expected to pick up going forward. "As expected, primary market supply is rising, with issuers from various segments--including banks, small finance banks, municipal bodies, and a large number of NBFCs, along with a few others—tapping the market for funds," a dealer at another brokerage firm said.

On Thursday, activity is expected to rise to nearly INR 140 billion. Bajaj Finance plans to raise INR 55 billion through 10-year bonds maturing on Jan. 25, 2036, and Adani Power has invited bids to raise INR 75 billion through four bond issuances. Aditya Birla Capital will tap the market to raise up to INR 5 billion through the reissue of bonds maturing on May 4, 2035. 

Other issuers, including Edel Finance Co., Coimbatore City Municipal Corp., Kanakadurga Finance, and Hinduja Leyland Finance have invited bids to raise funds from the corporate debt market. Activity is expected to pick up now as this is the last quarter of FY26, with companies likely to tap the market to meet their annual fundraising targets. "Market participants are closely watching primary market activity, which is expected to gain momentum in Oct-Dec, especially with bond issuances from banks in focus," the dealer quoted above said.

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 1.10 million was traded Thursday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 1.10 million of Tamil Nadu's 7.75%, 2032 bond was dealt at 7.3426%.

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Akul Nishant Akhoury

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