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Informist, Monday, Jan. 19, 2026

By Vaishali Tyagi

MUMBAI – Yields on corporate bonds rose sharply across tenures in the secondary market Monday, driven by weak investor participation from banks and mutual funds amid low flows and tight banking system liquidity, dealers said.

Corporate bond yields have also risen due to weak sentiment, steady supply, and amid macro concerns like government borrowing and INR pressure. Dealers said r have contributed to the uptick and expect yields to remain elevated.

"We are not seeing that aggressive activity from banks and mutual funds due to low cash available with them, and rates are likely to remain higher during this week on scheduled outflows for goods and services tax payments," a dealer at a brokerage firm said. "Weaker sentiment and low supply of bonds are driving yields higher, with MFs not showing significant interest due to low flows with them.

Investors are expecting higher yields even from top-rated, long-term bonds and short-term debt instruments amid tight supply of fresh papers and high government bond yields.

In the secondary market, mutual funds, insurance companies and banks were seen actively selling bonds across tenures. Banks and pension funds were also seen selling, but in low volume, dealers said. Monday, volume in the secondary market was at INR 124.46 billion on the National Stock Exchange and BSE combined, higher than 111.72 billion Friday. 

Bonds issued by IIFL Finance, Profectus Capital, Navi Finserv, Indiabulls Housing Finance, Navi Finserv, Krazybee Services, National Bank For Agriculture And Rural Development, Export Import Bank of India, Incred Financial Services, IIFL Finance, UGRO Capital, Andhra Pradesh State Beverages Corp., and Keertana Finserv were traded the most on exchanges Monday.

Activity in the primary market fell significantly Monday to INR 3.75 from Friday's issuances totalling over INR 127 billion. A handful of non-banking finance companies, including one state-owned entity, are in line to raise funds from the corporate debt market. Kerela Infrastructure Investment Fund Board which plans to raise INR 15 billion through the issuance of 10-year bonds, maturing on Jan. 21, 2036. Tuesday, activity is expected to rise, dealers said. Issuances worth over INR 29 billion.

Merchant bankers expect activity to revive once banking system liquidity improves, with MFs and investors looking to deploy cash. Portfolio churning should also rise, which will boost trading volume. "For now, the market will see mixed activity – some days primary market volume can be higher as some key issuer might tap the market with bigger quantum. However, other days can be dull for other issuer with usual quantum," the dealer quoted above said. "But non-banking companies will remain steady. Everybody's waiting for liquidity to improve, which might add to investors' interest, hence rise in bond issuances."

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bonds worth INR 40.00 million were traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 40.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 6.7221%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

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

Edited by Deepshikha Bhardwaj

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