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India Corporate Bonds: Yields steady in truncated week; volume low

Informist, Tuesday, Oct 25, 2022

 

By Subhana Shaikh

 

MUMBAI – Yields on corporate bonds ended on a steady note in the secondary market today amid low trade volume as investors refrained from placing large bets due to a truncated week, dealers said.

 

Domestic financial markets were closed Monday on account of Diwali and will be closed again on Wednesday.

 

"There was little activity on the secondary side of the corporate bond market with minimal investor participation," a dealer with a mid-sized brokerage said. "Brokerages and treasuries also closed early today because of festive season as mostly people are in holiday mode."

 

A few fund houses, insurance companies, and brokerage houses were active in the secondary market but in small quantum, which kept yields steady, dealers said.


Bonds issued by Bank of India, REC, Indian Railway Finance Corp, Andhra Pradesh State Beverages Corp, Uttar Pradesh Power Corp, Axis Bank, Lucknow Municipal Corp, and ICICI Bank were traded today.

 

Investors are also cautious as liquidity deficit has increased further. Liquidity in the banking system is currently estimated to be in a deficit of over 628.36 bln rupees, as against 138.88 bln rupees on Friday.

 

The liquidity deficit has widened further on account of outflows for goods and service tax payments. The liquidity will tighten further due to higher credit demand and increase in currency in circulation during the festival season, market participants said.

 

On Thursday, India Infradebt has invited bids for bonds maturing in 10 years. The state-owned company plans to raise up to 10 bln rupees. Udaipur Cement Works aims to raise 3.5 bln rupees through March 2025 bonds.

 

Sundaram Finance plans to raise 5 bln rupees through bonds maturing in five years, and JM Financial Products aims to raise up to 2 bln rupees through April 2025 bonds.

 

IKF Finance plans to raise 1.4 bln rupees through bonds maturing in April 2028, and Cholamandalam Investment and Finance Co aims to borrow up to 250 mln rupees through perpetual bonds. Biddings for all four bond offerings are scheduled on Thursday.

 

Today, deals aggregating 11.69 bln rupees were recorded on the National Stock Exchange against 32.21 bln rupees on Friday. BSE clocked deals worth 10.51 bln rupees, compared with 20.52 bln rupees on Friday.

 

UDAY BONDS

In the secondary market, Telangana's 2031 Ujwal DISCOM Assurance Yojana bonds aggregating 10 mln rupees were traded at a weighted average yield of 7.81%, data from RBI's Negotiated Dealing System – Order Matching System showed.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

FRIDAY

Three-year

7.64-7.66%7.65-7.66%

Five-year

7.68%7.68%

10-year

7.70-7.75%7.70-7.74%

 

End

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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