India Corporate Bonds: 10-yr ylds down ahead of govt H1 borrow plan


India Corporate : 10-yr ylds down ahead of govt H1 borrow plan

Tuesday, Mar 31


By Sanjana Raina


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NEW DELHI – The yields on 10-year corporate bonds fell by around 10 basis points today tracking the rally in government securities as  participant cheered the Reserve Bank of India’s notification to remove limit for non-residents from some dated securities, dealers said.


Appetite for the government papers was also boosted by reports that the Centre may slash its market borrowing for April because of disruptions caused by the nationwide lockdown.


Today, the 10-year 6.45%, 2029 bond closed at 102.22 rupees or 6.13% yield as against 101.71 rupees or 6.20% at settlement on Monday.


Since the beginning of the month, yields on corporate bonds had surged around 50-116 bps across maturities. However, they erased all after an unscheduled briefing on Friday by the Reserve Bank of India, where it cut the policy rate by 75 bps, leading to yields plunging 70-180 bps across tenures.


However, the yields on the three-year and the five-year maturity remained in thin range throughout the day. 


In the secondary market today, few fund houses sold papers maturing in 2023-25 to book on the last trading day of the current financial year, while some insurers sold these bonds due to redemption pressure. 


Banks have bought these papers from fund houses and insurance companies so the bid and ask spreads remained narrow and did not affect the yields.


They have bought AAA-rated papers issued by National Bank for Agriculture and Rural Development, Indian Railway Corp, Small Industries Development Bank of India, Power Corp, REC and National Highways Authority of India.


Today marked the last day of 2019-20 (Apr-Mar) financial year and market participants awaited the release of the Centre’s borrowing programme for Apr-Sep. The government has budgeted 7.8 trln rupees of market borrowing for 2020-21 (Apr-Mar).


On Monday, Reuters reported that the government was mulling over slashing the market borrowing for the month of April because of disruption to normal schedule because of national lockdown.


The report said that the government may do private placement of its securities with Life Insurance Corporation and the Reserve Bank of India to fund its requirements.


Banks are closed on Wednesday for annual closing of accounts, and Indian money markets are closed Thursday on account of Ram Navami.


The National Stock Exchange today reported aggregating 94.73 bln rupees, compared with 89.63 bln rupees on Monday. BSE saw totalling 42.28 bln rupees against 43.18 bln rupees.



In the secondary market, none of the Ujwal DISCOM Assurance Yojana bonds were traded today, data from the Reserve Bank of India’s Negotiated Dealing System-Order Matching System showed.








6.24-6.29% 6.25-6.30%


6.45-6.52% 6.45-6.50%

10 years

7.10-7.15% 7.20-7.25%




Edited by Akul Nishant Akhoury


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