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Informist, Monday, Mar. 2, 2026

By Vaishali Tyagi

NEW DELHI – Yields on corporate bonds in the secondary market ended steady Monday due to lower participation leading to low trading volume ahead of Holi on Tuesday, dealers said. Yields on corporate bonds remained unfazed as traders refrained from placing aggressive bets after the attack by the US and Israel on Iran Saturday, followed by Tehran's retaliation over the weekend, they said.

"No major trading activity was seen today (Monday) as many traders were on leave as they extended their weekend leaves since it is holiday tomorrow (Tuesday) for Holi," a dealer at a brokerage firm said.  

Dealers said if West Asia tensions escalate it could push corporate bond yields higher and lower volumes, but currently, there is no impact seen on bond yields. In fact, corporate bond yields were broadly flat, unaffected by government bond yields, which also saw minimal movement. "Market participants are cautious, with a 'wait and watch' approach...if West Asia tensions escalate, government bond yields may rise, potentially impacting corporate bond yields," the dealer quoted above said, and added there is uncertainty currently in the market. The 6.48%, 2035 gilt yield closed at 6.6753%, up from 6.6601% at the end of Friday's trading session.

Dealers said the secondary market was largely dull Monday with lower volume. Banks and mutual funds conducting need-based trading of bonds. Pension funds and insurance companies were largely absent in the secondary market, dealers said. The volume of trades in the secondary market was lower, with deals aggregating to INR 66.37 billion being recorded on the National Stock Exchange and BSE combined, against INR 93.88 billion Friday.

Papers issued by Andhra Pradesh State Beverages Corp., Kerala Infrastructure Investment Fund Board, Telangana State Industrial Infrastructure Corp., ESAF Small Finance Bank, Piramal Capital & Housing Finance, National Bank For Agriculture And Rural Development, Housing & Urban Development Corp. and IIFL Samasta Finance were traded the most.

In the primary market, bond issuances fell to nearly INR 7.8 billion from INR 155 billion Friday. Wednesday, volume in the primary market is seen to be significantly higher since issuances aggregating to over INR 192 billion will hit the market, including two key state-owned entities. Small Industries Development Bank of India will raise up to INR 80 billion Mar. 4 through bonds maturing on Jul. 10, 2029, while Bank of Baroda has invited bids to raise up to INR 100 billion through the issuance of green infrastructure bonds maturing in seven years on Mar. 5, 2033. Other companies, including Keertana Finserv, Sammaan Capital, and Mindspace Business Parks REIT will also borrow capital from debt market.

When asked about the potential impact on fresh supply of bonds after the joint military strikes by Israel and the US on Iran, followed by Tehran's retaliation, dealers said it will not immediately impact companies' fundraising plans. Primary market volumes are also unlikely to see significant changes. However, investors are closely monitoring the situation, and if tensions escalate, they may shift from corporate bonds to government bonds or other safer assets.

"Investors are keeping a watch on the situation closely...in case tensions escalate, we may see a shift towards safer assets, potentially impacting corporate bond yields and supply may fall for sometime," a dealer said.

UDAY BONDS

In the secondary market, one Ujwal DISCOM Assurance Yojana bond worth INR 11.30 million was traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 11.30 million of Telangana's 8.08%, 2029 bond was dealt at 6.6647%

BENCHMARK LEVELS FOR CORPORATE BONDS

End

Edited by Deepshikha Bhardwaj

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