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Informist, Friday, Jan. 30, 2026

By Vaishali Tyagi

NEW DELHI – Corporate bond yields slumped in the secondary market Friday as traders bought papers after the Reserve Bank of India conducted two 90-day variable rate repo auctions in the day to support liquidity in the banking system, dealers said. The net liquidity absorbed in the banking system by the RBI – a proxy for the liquidity surplus – was INR 829.68 billion Thursday, up from INR 677.08 billion Wednesday.   

"Trades were slow at the start of Friday, with investors focusing on adjusting their portfolios before the Budget (Union Budget for 2026-27 (Apr-Mar))," a fund manager at a mutual fund house said. "However, after announcement of liquidity measures by Reserve Bank of India, rates across debt market instruments fell."  

The central bank received bids worth INR 950.62 billion at the first 90-day variable rate repo auction and accepted bids for INR 250.04 billion. It conducted another 90-day variable rate repo auction for INR 2 trillion from 1300 IST to 1330 IST and took all bids worth INR 1.12 trillion.

Most traders were squaring off their books and maximising their profits by purchasing selective papers and by selling lower-yielding bonds and going light on positions ahead of the key event. An Informist poll of 30 economists, fund managers, and treasury heads estimated the Centre's gross market borrowing in the new fiscal year starting April at INR 16.3 trillion.

In the secondary market, mutual fund and insurance companies were seen buying papers across tenures. Pension funds and corporates also traded papers. Volume in the secondary market on the National Stock Exchange and BSE combined was INR 119.02 billion Friday, marginally higher than INR 117.55 billion Thursday.

Bonds issued by India Infradebt, Navi Finserv, Ambium Finserve, Krazybee Services, Power Finance Corp., Indiabulls Housing Finance, Berar Finance, Andhra Pradesh State Beverages Corp., Muthoot Finance, Indian Railway Finance Corp., Krazybee Services, Capri Global Capital, and Keertana Finserv were traded the most.

Activity in the primary remained subdued Friday, with issuances aggregating to nearly INR 16 billion from INR 92 billion Thursday. Dealers expect activity in the primary market to remain mixed ahead of the Union Budget for FY27 and the meeting of the RBI's Monetary Policy Committee next week.

On Monday, a single bond issuance by DMI Finance worth INR 800 million is lined up. Traders are holding off ahead of the Union Budget, and expecting indexation tax tweaks in the debt market, dealers said. If that happens, it could boost fund flows into mutual funds and subsequently boost primary market activity, they said.

UDAY BONDS

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

* INR 12.00 million of Tamil Nadu's 8.24%, 2028 bond was dealt at 6.7541%

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at 6.8252%

* INR 100.00 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at 6.7398%

* INR 50.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 6.7594%

* INR 3.00 million of Uttar Pradesh's 8.35%, 2029 bond was dealt at 6.8924%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

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

Edited by Tanima Banerjee

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