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Informist, Friday, Mar. 20, 2026

By Vaishali Tyagi

NEW DELHI – Corporate bond yields inched up Friday as risk-off sentiment sparked some selling, following a sell-off in the market for Indian government bonds, dealers said. The yield on the 10-year benchmark 6.48%, 2035 bond rose above the crucial 6.77% level as the Brent crude oil price jumped above $110 per barrel intraday and the rupee slumped 108 paise against the dollar, dealers said. The 10-year benchmark gilt closed at a yield of 6.7369%, up from 6.7330% Wednesday. The money markets were shut Thursday for the new years of some communities.

The decline in corporate bond prices was limited as traders avoided aggressive bets later in the day, opting for caution amid extreme volatility in the rupee and the government bond market, dealers said. "We expected to see heavy effect of G-Sec (government securities) yields on the corporate bond market and expected a large fall, but there was not much effect," a dealer at a state-owned bank said.

The impact of rising crude oil prices and the depreciating rupee on corporate debt was also limited by poor participation in the market. "There were only offers and bids in short-term bonds by SIDBI (Small Industries Development Bank of India) and NABARD (National Bank for Agriculture and Rural Development), no trade happened,"  the dealer said.

"There is uncertainty in the market due to the falling rupee and rising crude oil prices," another dealer said. Trading was limited in bonds maturing up to the four-year segment, as segments beyond this are mostly illiquid. Even top issuers like NABARD and SIDBI are not seeing aggressive demand. "Volumes were steady today (Friday) as it seems like an illiquid market, there is no demand in the long term," the second dealer said.

In the secondary market, deals aggregating to INR 129.41 billion were recorded on the National Stock Exchange and BSE combined Friday, marginally higher than INR 118.61 billion Wednesday. Pension funds were on both the buying and selling sides. "Banks did not participate much due to uncertainty, their money is invested. How much loss can they take?" the second dealer said. A dealer at a broking firm said mutual funds and banks were also buying and selling. Market participants said traders are adopting a wait-and-watch approach. "There is no risk appetite due to the uncertainty... trader who will hit stop-losses will bid," the dealer at the broking firm said.

Paper issued by State Bank of India, Kerala Infrastructure Investment Fund Board, HDB Financial Services, Andhra Pradesh State Beverages Corp., Axis Finance, National Bank for Financing Infrastructure and Development, Cholamandalam Investment and Finance Co., ESAF Small Finance Bank, and Muthoot FinCorp. were traded the most in the secondary market.

In the primary market, issuances aggregating to INR 132.90 billion are lined up for Monday, up significantly from INR 93.74 billion Friday. Union Bank of India Friday raised INR 30 billion through 10-year infrastructure bonds maturing on Mar. 24, 2036, at 7.16%.

Monday, market participants await bond issuances by two marquee issuers. Indian Bank plans to raise up to INR 50 billion through 10-year infrastructure bonds maturing on Mar. 24, 2036. SIDBI has invited bids to raise up to INR 60 billion through five-year bonds maturing on May 26, 2031. Market participants expect SIDBI's coupon to be in the range of 7.35-7.40%. "Bids will be higher, they might withdraw due to higher bids," the dealer at the broking firm said. "Other key issuers include NIIF Infrastructure Finance, Edel Finance, TVS Holdings and Fedbank Financial Services."

Going forward, corporate bond yields are expected to rise in line with G-Sec yields, driven by current tensions and panic in the corporate debt market since hostilities broke out in West Asia. "As G-Sec yields are rising due to the current tensions, corporate bonds yields will follow the same," said a dealer at a private-sector bank. "Hence, the selling pressure will also continue. Yes, there is a little panic in the corporate debt market since the war started. Liquidity crunch will continue, so does the pressure. All will depend on the geopolitical tensions."

UDAY BONDS

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None of the Ujwal DISCOM Assurance Yojana bonds were traded Friday in the secondary market, according to data on the RBI's Negotiated Dealing System-Order Matching system.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

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

With inputs from by Meera Nair 

Edited by Rajeev Pai

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