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India Corporate Bonds: Ylds tad up; MFs make room for fresh supply

Informist, Friday, Jan 27, 2023

 

By Parth Singh

 

NEW DELHI – Yields on corporate bonds rose slightly across tenures in the secondary market today on back of selling by mutual funds as they made room for fresh supply, awaited after the Union Budget for 2023-24 (Apr-Mar), due on Wednesday, dealers said.

 

The Indian money markets were closed on Thursday on account of Republic day.

 

“This is a pre-Budget movement, and there were also fewer participants trading in the market,” a debt dealer said. In the secondary market today, while banks were active on the buying side, mutual funds were both buying and selling.

 

Bonds issued by Jamnagar Utilities & Power Pvt Ltd, National Bank for Agriculture and Rural Development, HDFC, Piramal Enterprises Ltd, Tata Capital Housing Finance, and Vivriti Capital Pvt were traded the most across tenures.

 

Volume in the market was lacklustre. Deals aggregating 26.21 bln rupees were recorded on the National Stock Exchange, against 50.9 bln rupees on Wednesday. The BSE clocked deals worth 23.14 bln rupees, against 40.5 bln rupees on Wednesday.

 

“Because the market has already factored in a 25 basis point hike by the RBI, they (market participants) are now confident that the supply will pick up post Budget,” a debt dealer with a mid-sized fund house said.

 

Finance Minister Nirmala Sitharaman will present the Union Budget for 2023-24 (Apr-Mar), which will be followed by the Reserve Bank of India holding the Monetary Policy Committee’s meeting on Feb 8. 

 

Activity in the primary market remained subdued due to lack of heavy issuances ahead of the Budget. However, according to merchant bankers, some private entities are charting out plans to tap the primary market next week.

 

Frequent issuer REC Ltd is set to raise up to 40 bln rupees from the primary market early next week.

 

UDAY BONDS

In the secondary market, Rajasthan’s Ujwal DISCOM Assurance Yojana bonds maturing in June 2026, worth 197.79 mln rupees, were traded at a weighted average yield of 7.73%, data from the RBI’s Negotiated Dealing System–Order Matching System showed.

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

TENURES

TODAY

WEDNESDAY

Three-year

7.58-7.62%7.55-7.59%

Five-year

7.60-7.65%7.59-7.62%

10-year

7.65-7.70%7.65-7.68%

 

End

 

Edited by Manisha Baxla

 

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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© Informist Media Pvt. Ltd. 2023. All rights reserved

Source: Cogencis

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