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Informist, Monday, Mar. 23, 2026

By Vaishali Tyagi

NEW DELHI – Corporate bond yields surged in the secondary market Monday, tracking the significant rise in government bonds yields, dealers said. The rupee's fall to a record low sent government bond yields soaring. The surge in US Treasury yields and Brent crude oil prices also pushed gilts yield higher. The yield on the 10-year benchmark 6.48%, 2035 bond hit 6.8390%, the highest in financial year 2025-26 (Apr-Mar). 

"High yields in the g-sec (government security) got reflected in the corporate bond market...there was a massive sell-off in the three-year and five-year segments," a dealer at a private bank said. "If G-sec yields touch 6.90%, yields in the corporate bond market could go up by 35-40 basis points," the dealer said. 

Mutual funds, facing redemption pressure, sold bonds, which led to even more selling, pushing corporate debt yields further higher, they said. The selling was across various tenures. Dealers said market volatility is expected to continue due to the West Asia situation, with yields swinging wildly. "Very difficlt to say about where (yield) levels will stabilise because of the current situation in West Asia," the dealer quoted above said. "So there's a lot of volatality in the market and bids swinging in high levels. Morning will be at one level and evening will be at another level."

Indicative yields on three-year bonds of National Bank for Agriculture and Rural Development rose to 7.55-7.60% Monday from 7.40-7.42% Friday, while those on five-year NABARD bonds were up at 7.54-7.56% from 7.49-7.52%. The yields on 10-year bonds rose to 7.60-7.56% from 7.54-7.56%

In the secondary market, deals aggregating to INR 157.59 billion were recorded on the National Stock Exchange and BSE combined Monday, marginally higher than INR 129.41 billion Friday. Mutual funds were on the selling side due to redemption pressure, while most banks were on the buying side. "Overall, the volumes remained on lower side today (Monday) due to geopolitical issues and uncertainty in the market," a dealer at a state-owned bank said.

Paper issued by Union Bank of India, State Bank of India, National Highways Infra Trust, Muthoot Finance, Aditya Birla Capital, Kerala Infrastructure Investment Fund Board, Bajaj Finance, Reliance Industries, Cholamandalam Investment And Finance Co., HDFC Bank, and Kerala Infrastructure Investment Fund Board were traded the most in the secondary market.

In the primary market, bond issuances rose significantly over INR 132 billion Monday from INR 93.74 billion Friday. Indian Bank raised INR 50 billion through 10-year infrastructure bonds maturing Mar. 24, 2036, at 7.15%. "Despite challenging conditions, Indian Bank's infra bond issuance received a good response, indicating investors' interest," a dealer at another private bank said. "It did get good traction despite challenging market conditions."

Small Industries Development Bank of India Monday scrapped its issue of bonds maturing on May 26, 2031, as investors demanded higher coupon, dealers said. Dealers said Indian Bank infrastructure bond was fully subscribed as the a set of investors would have agreed to invest. The frequency of bonds issued by Indian Bank is low compared with SIDBI. So, investors would have preferred that over the SIDBI bond.

On Monday, over INR 19.20 billion worth of bonds will hit the market. Pilani Investment and Industries Co. plans to raise up to INR 10 billion by issuing bonds maturing in February 2029. Other key issuers include Mas Financial Services, Capri Global Capital, and Keertana Finserv. 

On primary market activity, the corporate bond market is experiencing a slowdown, with fewer issuances expected due to high yields deterring borrowers. Investors are also being cautious, leading to scrapped deals. Banks are also holding back on bond issuances amid uncertainty and market volatility. "There are no bond issuances from banks anytime soon," a dealer at a brokerage firm said.

However, a few traders are expecting relief in the government and corporate bond market Tuesday after US President Donald Trump announced five-day halt in strikes on Iran's power plants and energy infrastructure. This move is seen as a positive development, with investors anticipating a decrease in market volatility and a potential boost to bring yields down. 

BENCHMARK LEVELS FOR CORPORATE BONDS:

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Edited by Akul Nishant Akhoury

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