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Informist, Wednesday, Feb. 4, 2026

By Vaishali Tyagi

NEW DELHI – Yields on corporate bonds ended steady in the secondary market Wednesday after moving in a narrow range due to caution ahead of the outcome of the Reserve Bank of India's Monetary Policy Committee meeting Friday, dealers said. Yields are likely to remain in a tight range till the policy outcome, they said.

"There were mixed sentiments today...as both buying and selling was seen and many traders abstained from participating aggressively in the (corporate bond) market ahead of RBI meeting decision," a dealer at a brokerage firm said.

Most issuers are holding back ahead of the policy meeting outcome, with traders largely quiet and market participants waiting for cues from policy to guide the market, dealers said. "Market participants expect no rate cut (from upcoming policy meeting), but are waiting for guidance on liquidity and the RBI's tone on growth and inflation projections," a dealer at another brokerage firm said. Traders are betting on the RBI assuring the market that it will continue to provide sufficient liquidity to the banking system.

Dealers also anticipate a surge in primary market bond issuances after the RBI policy outcome, which could impact secondary market yields. Traders had expected higher borrowing in January due to lower yields, but a sudden spike pushed issuers away. "Now, we expect issuances to pick up post-RBI policy meeting," said the dealer quoted earlier, citing the liquidity crunch in January and subdued participation as factors that contributed to the rise in yields.

Net liquidity absorbed from the banking system by the RBI -- a proxy for the liquidity surplus -- rose to INR 2.17 trillion Tuesday from INR 1.71 trillion Monday, which boosted activity in the corporate debt market. In the secondary market, a few mutual funds and insurance companies were seen buying and selling bonds across maturities aggressively. Pension funds, banks, and corporates also traded in papers. Volume in the secondary market on the National Stock Exchange and BSE combined was INR 149.50 billion Wednesday, marginally up from INR 146.22 billion Tuesday.

Bonds issued by Bharat Petroleum Corp., Export-Import Bank of India, National Bank for Agriculture and Rural Development, Spandana Sphoorty Financial, Incred Capital Financial Services, MAS Financial Services, Power Finance Corp., Namra Finance, Profectus Capital, Godrej Industries, HDB Financial Services, and Krazybee Services were traded the most.

In the primary market, participation from issuers remained dull, with bonds aggregating to INR 7 billion being issue. Activity is expected to rise Thursday, but volume is seen low around INR 16 billion. NABKISAN Finance plans to raise up to INR 5 billion through tier-II bonds maturing on Feb. 6, 2036, while Tata Projects plans to raise INR 5 billion through two separate bonds. Other issuers include Tiruchirappalli City Municipal Corp., Akara Capital Advisors, and Marwadi Shares and Finance.

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Ashish Shirke

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