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Informist, Friday, Aug. 7, 2026

 

By Vaishali Tyagi 

 

NEW DELHI – Corporate bond yields ended broadly unchanged after moving in a narrow range Friday as market participants shifted their focus to primary market issuances, dealers said. Amid several primary market issuances, activity in the secondary market remained subdued, leaving yields little changed, they said.   

"Secondary market activity was largely muted today (Friday) as most traders focused on primary issuances... as everyone was waiting for fresh supply at least such papers like REC," a dealer at a brokerage firm said. "The primary market is picking up, with key issuers raising sizeable amounts and more expected in the coming weeks."

 

The primary market saw brisk activity Friday, led by a major issuance from REC. Overall, companies raised bonds worth INR 131 billion, sharply up from INR 16.45 billion Thursday. REC raised INR 63.46 billion through two bonds, dealers said. The state-owned power financier raised INR 30 billion through bonds maturing in August 2029 at 7.28% and INR 33.46 billion through bonds maturing in August 2041 at 7.49%.

 

Dealers said the coupons on REC bonds were in line with expectations and participation was average. The market had expected stronger participation, which did not materialise. For the 15-year bond, insurance companies and pension funds were likely participants, dealers said. Market participants had expected the cut-off on REC's August 2029 bonds to be in the range of 7.20–7.35%, while that on August 2041 bonds to be 7.45-7.55%.

 

Other key issuers were from Bajaj Finance, Ashok Leyland, and TVS Motor. Bajaj Finance raised INR 11.15 billion through the issuance of bonds maturing on Nov. 9, 2029, while TVS Motor mopped up INR 10 billion through the issuance of bonds maturing on Nov. 10, 2029. Ashok Leyland borrowed INR 3 billion through the issuance of two-year bonds.

 

Monday, non-banking financial companies will raise INR 3.60 billion. Satin Finserv has invited bids to raise up to INR 1.25 billion through the issuance of two-year bonds. Other issuers include Vedika Credit Capital, Monedo Financial Services, and Mahaveer Finance India.

 

Dealers expect corporate bond market activity to pick up in the near term, with several issuers likely to raise funds. "We expect more key issuers to tap the market as the as we approach more towards mid of August," a dealer at a mutual fund house said.

 

In the secondary market, a lack of fresh triggers kept corporate bond yields in a tight range. Trading volumes remained muted, with most activity driven by need-based deals. During the day, yields rose 1-2 basis points, tracking gilts, but later pared those gains.

 

"There were no fresh cues for investors to take positions... gilts (government bonds) gave some direction when they moved higher, but that did not sustain. So, levels were largely unchanged from Thursday, except for a few papers that moved 1-2 basis points either way," the dealer at a brokerage said. "In fact, corporate bond prices edged up marginally toward the close on buying by some foreign banks, but gave up those gains later as mutual funds sold. This kept yields in a narrow range through the day," the dealer added.

 

The yield on three-year bonds issued by the National Bank for Agriculture and Rural Development was 7.33-7.35%, broadly unchanged from 7.35% Thursday, while the indicative yield on NABARD's five-year bonds was 7.38–7.40% against 7.39–7.40% on the previous day. The indicative yield on NABARD's 10-year bond ended at 7.45-7.47% against Thursday's 7.45%. The yield on the 10-year benchmark Indian government bond settled at 6.7651% Friday, down from 6.7666% Thursday. 

 

In the secondary market, overall deals worth INR 74.58 billion were recorded on the National Stock Exchange and BSE combined, down from INR 121.93 billion Thursday. Papers issued by Piramal Finance, UGRO Capital, Poonawalla Fincor, National Highways Authority of India, Muthoot Fincorp, REC, and Navi Finserv were actively traded.  Mutual funds were seen selling bonds across tenures, while pension funds, banks and a handful of insurance companies bought bonds. Dealers said quite a few foreign banks were seen trading short-term bonds.   

 

UDAY BONDS

In the secondary market, five Ujwal DISCOM Assurance Yojana bonds worth INR 255 million were traded Friday, according to data on the RBI's Negotiated Dealing System-Order Matching System.

 

* INR 100.0 million of Telangana's 7.81%, 2027 bond was dealt at 6.1835%

* INR 100.0 million of Tamil Nadu's 8.04%, 2029 bond was dealt at 6.798%

* INR 50.00 million of Tamil Nadu's 7.72%, 2029 bond was dealt at 6.7986%

* INR 3.00 million of Telangana's 8.04%, 2031 bond was dealt at 7.1583%

* INR 2.00 million of Uttar Pradesh's 8.75%, 2030 bond was dealt at 6.8616%

 

BENCHMARK LEVELS FOR CORPORATE BONDS:

Tenure	Friday	Thursday
Three-year	7.33-7.35%	7.35%
Five-year	7.38–7.40%	7.39–7.40%
10-year	7.45-7.47%	7.45%

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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