Lets say A buys a bond of face value 1000 rupees and the coupon rate of the bond is 10% then the Coupon amount will be 100 which will be issued at the end of the year if the coupon rate is for a year ! Is that correct?
But if there is a change in market price then the maturity value of the bond increases and rises to 1100 so the bond yield reduces 100/1100 =9.09 %
No - the maturity value of the bond does not change. The bond holder will still get 1000 when the bond matures.
The yield gives a sense of the value of a bond regardless of coupon rates. Remember that coupon rates (for a fixed-rate bond) and redemption value do not change over the life of a bond. So if a bond's yield increases, that means that it can be bought (or sold) for a lower price - meaning that you get more relative to the purchase price.
So if a bondholder holds a bond whose yield increases, that means that the price has gone down - it does not mean that the coupons or redemption value has changed. The choice is to either sell at the lower price (presumably investing in something else) or hold the bond until maturity.
I read that investors seek yield rather than coupon rates. Why is that?
I'm not sure what the context is, but investors want high yields when buying bonds (since it implies either low prices or high coupons). That yield is effectively "locked in" so long as the investor holds the bond.