India Corporate Bonds
Yields surge tracking gilts, selling spree by MFs
This story was originally published at 20:26 IST on 16 March 2026
Register to read our real-time news.Informist, Monday, Mar. 16, 2026
By J. Navya Sruthi
MUMBAI – Yields on corporate bonds surged Monday as mutual funds and private sector banks continued to sell corporate bonds due to redemption pressure owing to tax outflows during the weekend, dealers said. Corporate bond yields also rose as government bond yields climbed amid higher crude oil prices.
Dealers said yields on corporate bonds rose around 10 basis points Monday in most tenors. A dealer at a state-owned bank said heavy state-bond supply, continuous selling by mutual funds, and a rise in gilt yields are the main drivers of higher yields on corporate bonds. Monday, the yield on the 10-year 6.48% 2035 benchmark gilt ended at 6.71%, up from 6.68% Friday
Friday, the Reserve Bank of India said states will raise INR 584 billion through bonds Tuesday, sharply higher than the INR 438 billion in the indicative calendar for the week. The Brent crude rose to $106.50 per barrel Monday after the US struck Iran's oil-exporting Kharg Island. At 1701 IST, the most active May Brent Crude contract was at $103.07 per barrel, largely steady from the previous close.
"There is investor appetite, but yields are taking cues from government bonds. If we see, NABARD (National Bank for Agriculture and Rural Development) set 7.10% coupon on March 2029 bonds in February. Last week it scrapped one (issuance) and today (Monday) it set a coupon of 7.44% on July 2029 bonds," the dealer at the state-owned bank said. The dealer expects NABARD's July 2029 bonds to trade at 7.49% in the secondary market.
Mutual funds were seen selling corporate bonds due to redemption pressure to pay advance corporate and income tax for the quarter, dealers said. According to market participants, outflows of around INR 1.5 trillion were seen last week for advance tax payments.
Monday, deals aggregating to INR 108.71 billion were recorded on the National Stock Exchange and BSE combined in the secondary market, down from INR 124.75 billion Friday. Dealers said most market participants were active in the primary market as there were issuances worth over INR 120 billion Monday.
Papers issued by National Housing Bank, Indian Railway Finance Corp., Edelweiss Financial Services, Motilal Oswal Financial Services, Navi Finserv, Ambium Finserve, Small Industries Development Bank of India, Indiabulls Housing Finance, UGRO Capital, Keertana Finserv, Andhra Pradesh State Beverages Corp., Akara Capital Advisors, Muthoottu Mini Financiers, STL Networks, Satin Finserv, IIFL Samasta Finance, Sammaan Capital, Telangana State Industrial Infrastructure Corp., Kerala Infrastructure Investment Fund Board, and NABARD were traded the most in the secondary market.
NABARD and Export-Import Bank of India were in the primary market Monday. NABARD raised INR 72.65 billion through bonds maturing on Jul. 17, 2029, at a coupon of 7.44%. EXIM Bank raised INR 40 billion through bonds maturing on Mar. 18, 2031, at a coupon rate of 7.23%.
Most participants expected NABARD to set a coupon around 7.40-7.45%. "NABARD is aggressively funding from the market. They need funds for the year-end balance sheet," a dealer at a private bank said. Dealers expect more banks and companies to raise funds through bonds in March due to funding requirements and as it is also the last month of this financial year.
UDAY BONDS
==========
In the secondary market, one Ujwal DISCOM Assurance Yojana bond was traded Monday, according to data on the RBI's Negotiated Dealing System-Order Matching system.
* INR 10.50 million of Andhra Pradesh's 7.35%, 2030 bond was dealt at 6.9012%
BENCHMARK LEVELS FOR CORPORATE BONDS:
Tenure | Monday | Friday |
Three-year | 7.40-7.44% | 7.29-7.33% |
Five-year | 7.45-7.50% | 7.34-7.41% |
10-year | 7.50-7.55% | 7.47-7.50% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
With input from Nandini Sinha
Edited by Saji George Titus
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.
To read more please subscribe
Share this Story:
