Indian corporate bond yields were little changed in absence of fresh trigger as the market rates align to the federal bond yields after last week's policy rate hike.
India raised interest rates for the 12th time in 18 months and signalled more was to come, confounding expectations that it was coming to the end of its tightening cycle and putting it at odds with global peers focused on reviving weak demand.
"Some deals have started happening but the quantum is not very large as mutual funds and insurance companies are not actively investing because of paucity of funds," a dealer with a mutual fund said.
Activity in the primary market is expected to pick up gradually as the week unfolds, as Indian issuers ascertain the full impact of the monetary policy, and also finalise their fresh fund raising plans at start of a new quarter.
The National Bank for Agriculture and Rural Development ( NABARD) plans to raise at least 4.5 billion rupees through 1-year bond at 9.65 percent, a source with direct knowledge of the deal told Reuters on Wednesday.
India's Housing Development Finance Corp is planning to raise 2.5 billion rupees via placement of 10-year bonds at 9.60 percent with Calyon, a source with knowledge of the deal told Reuters on Wednesday.
The benchmark five-year yields and the 10-year corporate bond were lower 1 basis points at 9.46 percent and 9.47 percent, respectively.
The spread between the five-year corporate bond and government bond was 93.57 basis points from 94.24 basis points on Monday.
The spread between the 10-year corporate bond and government bond was at 94.00 basis points from 94.14 basis points at its previous close.
Total volume in corporate bonds was 14.42 billion rupees compared with 16.40 billion rupees on Tuesday.
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