More Stories

Informist, Monday, Feb. 2, 2026

By Vaishali Tyagi

NEW DELHI – Yields on corporate bonds rose in the secondary market Monday, tracking the rise in government bond yields, market participants said. Both mutual funds and insurance companies sold bonds in three-year and five-year tenors, which added to the rally. However, yields on 10-year bonds were largely steady as there were very few trades in 10-year and above tenure, they said. 

Government bond yields rose sharply after the Centre's gross borrowing for 2026-27 (Apr-Mar) was higher than expected at a record INR 17.20 trillion. Selling pressure would remain  until the outcome of the Monetary Policy Committee's meeting outcome on Friday, they said.

The corporate bond market was dull and weak (due to one-sided presence of sellers mainly mutual funds), with sellers dominating the market. Negative sentiment prevailed across tenures, markets including government and corporate, bonds, and money market instruments, dealers said. "Activity was largely confined to the shorter end of the curve, with mutual funds emerging as major sellers due to a lack of buyers," a dealer at a brokerage firm said.

The market saw a slight recovery on Friday, with yields falling 3-4 basis points. However, this rally was largely after liquidity infusion. Traders bought papers after the Reserve Bank of India conducted two 90-day variable rate repo auctions to support liquidity in the banking system. The net liquidity absorbed from the banking system by the Reserve Bank of India -- a proxy for the liquidity surplus -- was INR 886.42 billion Sunday, down from INR 1.84 trillion on Saturday.

In the secondary market, mutual fund and insurance companies were seen selling papers in shorter tenure. Pension funds and corporates also sold papers. Volume in the secondary market on the National Stock Exchange and BSE combined was INR 70.36 billion Monday, significantly lower from 119.02 billion Friday.

Bonds issued by Union Bank of India, State Bank of India, Kerala Infrastructure Investment Fund Board, Muthoot Finance, Indian Railway Finance Corp., Krazybee Services, Capri Global Capital, India Infradebt, Navi Finserv, Ambium Finserve, Krazybee Services, Power Finance Corp., and Andhra Pradesh State Beverages Corp. were traded the most.

Activity in the primary remained subdued Monday, a single bond issuance by DMI Finance worth INR 800 million. Dealers expect activity in the primary market to remain mixed ahead of the meeting of the RBI's Monetary Policy Committee outcome this week. On Tuesday, only two bond issuances worth INR 3.25 billion are lined up.

BENCHMARK LEVELS FOR CORPORATE BONDS

End

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

Edited by Deepshikha Bhardwaj

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.