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Informist, Wednesday, Mar. 11, 2026

By Vaishali Tyagi

NEW DELHI – Corporate bond yields remained confined in a narrow range Wednesday due to cautious investor sentiment, dealers said. Yields fell 1-2 basis points, tracking government bond yields, while participants shifted their focus to the primary market, especially on bonds issued by several non-banking financial companies and two state-owned entities, they said.

Geopolitical tensions post-US-Israel attack on Iran and Tehran's retaliation are driving market volatility, dealers said. "Geopolitical uncertainty and global market moves are key factors these days," dealers said. "We expect yields to remain range-bound till tensions ease. Traders may look to accept it as part of short-term market phenomenon and long-term investors may look to focus on broader macros and fundamentals."

Indicative yields on three-year National Bank for Agriculture and Rural Development fell 1-2 basis to 7.21-7.23% Wednesday from 7.23-7.26% Tuesday, while those on five-year NABARD bonds fell to 7.27-7.31% from 7.29-7.32%. The yields on 10-year bonds were at 7.40-7.42% from 7.42-7.45%.

Government bonds yields ended lower as traders had bet on RBI buying benchmark papers such as the 10-year benchmark 6.48%, 2035 bond and the 15-year benchmark 6.68%, 2040 bond at the open market operations auction scheduled Friday, but contradictory to traders' expectations, the central bank did not include any benchmark papers. The 10-year benchmark 6.48%, 2035 gilt closed at 6.6366%, down from 6.6737% Tuesday. Sovereign bond yields closely tracked the movement of Brent crude oil prices. Brent crude oil prices for May delivery briefly eased below $90 per barrel towards the end of Indian market hours, helping the fall in yields. 

Dealers said trading was sluggish in corporate bonds maturing post-2029, with the 10-year and above maturity segment almost illiquid. Mutual funds snapped up 2028-29 papers, driving some movement in shorter tenures.

In the secondary market, deals aggregating to INR 113.37 billion were recorded on the National Stock Exchange and BSE combined Wednesday, similar to INR 112.66 billion Tuesday. Mostly, mutual funds were seen actively buying shorter-tenure bonds. Banks and companies were seen selling and buying bonds across tenures. Pension funds and insurance companies were absent from the market, dealers said. 

Papers issued by Muthoot Fincorp., Punjab National Bank, Housing and Urban Development Corp., State Bank of India, IIFL Finance, National Bank For Agriculture and Rural Development, National Bank For Agriculture and Rural Development, Cholamandalam Investment and Finance Co., and Piramal Capital & Housing Finance were traded the most.

In the primary market, bond issuances rose over ten times to INR 77.20 billion Wednesday from INR 7.2 billion Tuesday. Bharti Telecom Ltd., a holding company of Bharti Airtel Ltd., raised INR 45 billion by issuing two bonds with different maturities. 

On Thursday, over INR 153 billion worth of bonds will hit the market. Traders are keeping a close eye on issuances from two marquee issuers Thursday. National Bank for Agriculture plans to raise up to INR 80 billion through the issuance of bonds maturing on Jun. 22, 2033. Dealers expect NABARD's coupon to be in the range of 7.25-7.30%. Another state-owned entity, REC plans to raise up to INR 60 billion through the issuance of two bonds of different maturities. Other issuers, including Repco Home Finance, Vedika Credit Capital, and Oxyzo Financial Services, will also tap the market to raise funds. Dealers expect activity to remain mixed and skewed towards the downside, with market players awaiting an end to the Iran-US-Israel conflict.

UDAY BONDS

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In the secondary market, two Ujwal DISCOM Assurance Yojana bonds aggregating to INR 150.00 million were traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

* INR 100.00 million of Uttar Pradesh's 8.44%, 2029 bond was dealt at 6.6532%

* INR 50.00 million of Uttar Pradesh's 8.63%, 2029 bond was dealt at 6.6522%

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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