More Stories

Informist, Friday, Mar. 27, 2026

By Nandini Sinha, Vaishali Tyagi and Meera Nair

MUMBAI – Yields on corporate bonds ended higher Friday as traders sold corporate bonds tracking a rise in government bond yields and a record fall in the rupee, dealers said. Dealers said activity was concentrated in bonds having maturity up to three years. Yields in the corporate bond market were seen moving in tandem with yields on government bonds. Dealers remained split on whether the surge in government and corporate bond yields will persist. Some expect the elevated levels to hold as long as the West Asia conflict continues. 

"Corporate bond market was given today (selling Friday) tracking government bond, as we saw major rise in yields due to higher crude prices and due to weakness in rupee which led to FII (foreign institutional investor) outflows and selling across assets," a dealer at a state-owned bank said. Foreign institutional investors have not been actively participating in the corporate bond market ever since the war in west Asia began and have been on the sell-off side. These companies have turned to Australia and Indonesia instead."

Government bond yields ended higher as fears of fiscal slippage in 2026-27 (Apr-Mar) added to prevailing worries about a rate hike by the Reserve Bank of India's Monetary Policy Committee due to the rise in crude oil prices following the war in West Asia, dealers said. The 10-year benchmark 6.48%, 2035 gilt closed at a yield of 6.9419%, up from 6.8750% in the previous session. Money markets were shut on Thursday for Ram Navami. The 10-year benchmark yield closed at its highest level since Jul. 26, 2024. The rupee fell to a record closing low of 94.8125 a dollar Friday, driving away foreign portfolio investors.

Corporate bond yields also edged higher as traders pared holdings, and favoured higher yielding state government bonds due to lucrative rise in yields. State bond yields jumped past 8% at Friday's auction amid weak demand, dealers said. "The difference between high yields on state bonds seen in 2022 and 2026 is that it took place in the early cycle in 2022, but this time it's taking place in the late cycle, towards the end of the financial year with the rise in the Brent Crude oil prices," a dealer at a private sector banks said. 

Indicative yields on three-year bonds of the National Bank for Agriculture and Rural Development rose to 7.59-7.64% compared with 7.55-7.61% Wednesday, while those on five-year NABARD bonds were up at 7.61-7.67% from 7.56-7.63%. The yields on 10-year bonds rose to 7.73-7.76% from 7.63-7.71%.

Dealers said a fall in corporate bond yield was limited later in the day as traders avoided placing large bets due to uncertainty. "Now people are holding and assessing before placing any bets, those who are in dire need of funds are still selling, which is pushing yields higher," a dealer at another public sector bank said. "Currently trading is happening between 6.95-6.97% levels technically speaking, it's difficult for the yields to come down. All are in the wait-and-watch mode, so I don't think there will be any aggressive buyers."

In the secondary market, deals aggregating to INR 200.36 billion were recorded on the National Stock Exchange and BSE combined Friday, significantly higher from INR 131.96 billion Wednesday. Mutual funds sold bonds due to redemption pressure while banks were seen selling and buying. Insurance companies and pension funds also sold corporate bonds to invest in state bonds. 

Papers issued by State Bank of India, Edelweiss Housing Finance, National Bank For Agriculture And Rural Development, Edelweiss Financial Services, Muthoot Finance, LIC Housing Finance, IIFl Finance, Vivriti Capital, UGRO Capital, The Andhra Pradesh Mineral Development Corp., Unifinz Capital India, and Adani Enterprises were traded the most in the secondary market.

In the primary market, issuances rose sharply to INR 63.20 billion from INR 19.20 billion Wednesday. Non-banking finance and housing companies were among those that tapped the market Wednesday. Monday, nearly INR 63 billion of bonds will hit the market. Hyderabad Metropolitan Development Authority plans to raise up to INR 50 billion through bonds maturing on Mar. 15, 2046. Kosamattam Finance Ltd. will raise INR 2 billion through three-year bonds. Other issuers include Unigold Finance Ltd. and Hinduja Leyland Finance Ltd.

Looking forward, dealers said that the earnings of companies are expected to take a hit in the first quarter of 2026-27 (Apr-Mar) due to the military conflict in west Asia. Companies could see a dent of INR 500 billion-700 billion in the revenues first quarter of FY27. However, dealers see no major issuances of corporate bonds by these companies in their outlook in Apr-Jun.

Public sector banks, borrowers who scrapped their issuances, as well as those who raised funds through certificates of deposit are expected to issue bonds in the primary market in the Apr-Jun quarter, dealers said. "There are no huge issuances or deals in the pipeline," a dealer at another state-owned bank said. "Yes, few maturities are coming in but (I) don't think they will raise money that quickly."

UDAY BONDS

==========

No Ujwal DISCOM Assurance Yojana bond was traded Friday, according to data on the RBI's Negotiated Dealing System-Order Matching system.

BENCHMARK LEVELS FOR CORPORATE BONDS:

End

Edited by Deepshikha Bhardwaj

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.